Doing business in the United States can be one of the fastest ways to fuel your company’s growth, expand your potential customer base and give you access to new employees and sources of investment capital. In this presentation, from the law practice of Fried Frank, the U.S. Embassy in London, the U.S. Department of State, and Early Growth Financial Services, address some of the challenges international startups face when setting up in the United States, including visa concerns, legal issues, and tax and accounting considerations.

1. Coming to America:
Bringing Your Startup to the U.S.
(Part I)

2. • Why the US?
• How to get here
• Legal considerations
• Staffing
• Business visas and visa requirements
• Accounting
• Tax considerations
Presentation Overview

3. The U.S. Startup Ecosystem
 Choosing the right business partners
- Legal
- Banking
- Accounting / Finance
- Human resources
 Ancillary value

4. #SelectUSATech
@SelectUSATech
John Breidenstine
Minister Counselor for Commercial Affairs
U.S. Embassy London

5. So, what is SelectUSA?
SelectUSA promotes and facilitates
business investment in order to support
job creation, spur economic growth, and
promote American competitiveness.
www.selectusa.gov

6. “There is no better place in the world
to do business than the United States
of America.” - President Barack Obama
The United States consistently
ranks among the top for fair,
balanced and competitive
business climate.
• #1 in AT Kearney’s 2013
FDI Confidence Index
• #1 in IESE Business
School’s 2011 Venture
Capital Index
• #4 in the World Bank’s
Ease of Doing Business
Index
Why?

7. Largest Country Sources of FDI in
the
United States by 2012 Stock Position
Ran
k Market
% of Total
Stock
($2.7 trillion)
Million
USD
1
United
Kingdom
21.30%
564,71
4
2 Japan 11.67%
309,38
3
3 Germany 10.27%
272,26
2
4 Canada 9.85%
261,13
3
5 France 8.36%
221,72
4
6 Netherlands 4.91%
130,07
5
7 Ireland 4.82%
127,67
4
8 Switzerland 4.75%
126,00
7
9 Spain 1.96% 51,894
10 Australia 1.93% 51,051
11 Belgium 1.8% 47,728
12 Sweden 1.56% 41,449
13 Italy 1.25% 33,194
14 Norway 1.16% 30,814
15 Mexico 1.10% 29,175
U.S. FDI Trends
Top 15 FDI Stock Positions, 2012

8. What are companies doing?
• Reshoring
• Honda
• Samsung
• Siemens

9. Why do we care?
• World’s largest recipient of FDI
• 20.5% of U.S. exports
• Nearly 6 million jobs
• Average wage of $77,600
• $45.2 billion in R&D annually
• Investments in fixed assets

10. Why should you care?
• The U.S. – great target for expansion
• 55% of global ICT R&D
• 40% share of all tech purchases
• Apple, Intel, Motorola and more

11. Why most successful
startups are in the U.S.?
Access to:
• Role models
• Funding
• Business
Infrastructure
• Distribution
• Monetization
capabilities
• Talent
• Practiced Management
• Production
• Sheer Serendipity

12. SelectUSATech Seminar Series
• London – March 10, 2014
• Dublin – June 25, 2014
• Edinburgh – September 30, 2014
• Belfast – October 21, 2014
• Webinars
• And, still more yet to come…

13. Fried, Frank, Harris, Shriver & Jacobson
LLP
Daniel Glazer
(daniel.glazer@friedfrank.com)
tech.friedfrank.com / @friedfranktech
Setting Up Your Business in the
US:
Legal Considerations
Attorney Advertising. Prior results do not guarantee a similar outcome. © 2014 Fried Frank Harris Shriver
1
3

14. US Expansion: 5 key legal
considerations
Consider your corporate
structure
1
4
Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com
or by emailing tech@friedfrank.com
tech.friedfrank.com /

15. US Expansion: 5 key legal
considerations
IP: Trademarks, patents, NDAs
1
5
Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com
or by emailing tech@friedfrank.com
tech.friedfrank.com /

16. US Expansion: 5 key legal
considerations
Create US terms and conditions
1
6
Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com
or by emailing tech@friedfrank.com
tech.friedfrank.com /

17. US Expansion: 5 key legal
considerations
Understand the litigation
landscape
1
7
Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com
or by emailing tech@friedfrank.com
tech.friedfrank.com /

18. US Expansion: 5 key legal
considerations
Don’t overpay or underutilize
lawyers
1
8
Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com
or by emailing tech@friedfrank.com
tech.friedfrank.com /

19. Business Visas for the US
Robert Ben Parkinson
E1/E2 Business Visa Analyst
US Embassy London

20. America is Open for Business
…and it is (relatively) easy to get a
business visa
Four primary ways to do business in the US
• ESTA, Visa Waiver Program
• B1, Business Visa
• L1, Intra-Company Transfer Visa
• E1/E2 Treaty Trader and Treaty
Investor Visas

21. Scope of the Program
• The E1/E2 Visa program is becoming very popular
with Foreign Companies looking to do business in
the US.
• We estimate there are currently 3000 British
E1/E2 companies operating in the US
• With annual revenue in excess of $200 Billion
• They employ 900,000 staff (Mostly Americans)
• In 2013 we reviewed 650 UK businesses
• And issued over 3,000 E1/E2 Visas to employees
• We are expecting a 35% increase over last year
• We see lots of IT startups
• As well as lots of businesses in advertising ,
banking, finance and various consultancies and

22. E1/E2 Treaty Trader/Investor
Visas
E1 Treaty Trader Visa
 Goal: Increase trade
between the US and
foreign treaty country
 Good Example:
A well established British
company looking to staff
a forward sales office in
the US.
E2 Treaty Investor Visa
 Goal: To get foreign
companies to set up
businesses in US
 Good Example:
A recent tech startup
looking to move their
operation to California.

23. E1 Visa Requirements
1. There must be an existing treaty between the US
and the Treaty Country in place.
2. The company must be at least 50% owned by
Treaty Nationals.
3. Business activities must constitute trade.
4. The trade must be substantial.
5. At least 50% of the company’s trade must take
place between the US and Treaty Country.
6. Employees must be an executive, hold a
supervisory position or possess essential skills.
7. Applicant must intend to depart the US once their
visa has expired.

24. E2 Visa Requirements
1. There must be an existing treaty between the US and the
Treaty Country in place.
2. The company must be at least 50% owned by Treaty Nationals.
3. The applicant or company must invest or be in the process of
investing in the US.
4. The company must be a real and active commercial enterprise.
5. The Investment must be substantial or at least sufficient to get
the enterprise off the ground.
6. The company needs to (eventually) be profitable or benefit the
US economy.
7. The owner of the company must be in a position to develop and
direct the Enterprise.
8. Employees must be an executive, hold a supervisory position or
possess essential skills.
9. Applicant must intend to depart the US once their visa has
expired.

25. Glenn McCrae
Chief Strategy Officer
Early Growth Financial Services
@EarlyGrowthFS

26. • Type of entity (C Corporation)
• Registration requirements
• Federal, state, local
• Tax sharing agreement
• Between Parent and U.S. subsidiary
Corporate Structure

27. • Who will be employed in U.S.?
• U.S. citizen, Resident, or Non-Resident Alien?
• Contractor or Employee?
• What’s the difference?
• How will we pay our people?
• Internal or external payroll services provider?
• What forms of compensation are expected?
Hiring and Staffing Considerations

28. • How will employees be taxed?
• Does the employee’s country of origin have tax
treaty with U.S.?
• What does “permanent establishment” mean?
How does it affect U.K. citizens?
• Types of U.S. payroll taxes
• Both employer and employee obligations
• FICA (Social security), Medicare, income tax
Payroll Tax Considerations

29. • Region / Location
• What is driving decision to come to U.S.?
• Will location influence success?
• Type of space – colocation or stand alone
• Cost of space
• Service required
Logistics – Selecting Space

30. • Income tax return
• Foreign entity filing
• FBAR filing
• State filings
• Local registration and taxes
• Separate business and personal finances
• Deduct business expenses
• Stay on top of payroll taxes and 1099s
Corporate Tax Compliance
Takeaway – not overly
complex or expensive, if
handled appropriately

31. Append
ix

32. Coming to America: The Legal Basics
3
2tech.friedfrank.com / @friedfranktech
“Coming to America: The Legal Basics,”
is now available as a free download on
iTunes (search keywords “Coming to
America”).
The guide is also available as
an eReader file and as a PDF through
our microsite, tech.friedfrank.com.
The guide summarizes key legal issues
that companies looking to expand to the
US should consider, including sections
on US tax, IP, employment, immigration,
corporate, financing and litigation
considerations.
A guide to indicative legal and related
costs for US expansion is available

33. Coming to America: Part
II
Accessing U.S. Capital
September 17, 2014
7:00-8:00am PT

34. Daniel Glazer
Fried Frank
E: daniel.glazer@friedfrank.com
P: +1.212.859.8674 (New York)
P: +44.20.7972.9159 (London)
L:
www.linkedin.com/in/danielcglazer
tech.friedfrank.com
@friedfranktech
John Breidenstine
U.S. Embassy London
E: john.breidenstine@trade.gov
P: +44 20 7894 0434
http://london.usembassy.gov
@SelectUSATech
Robert Ben Parkinson
U.S. Embassy London
E: ParkinsonRB@state.gov
L:
uk.linkedin.com/in/robertbenparkin
son
http://london.usembassy.gov
Glenn McCrae
Early Growth Financial Services
E:
gmccrae@earlygrowthfinancialservice
s.com
P: 415.320.5753
L: www.linkedin.com/in/glennmccrae
www.earlygrowthfinancialservices.com
@EarlyGrowthFS