Starting a U.S. Business
There are many questions you could ask about legal issues in the USA and of course every company has its own set of unique challenges. However, the Greater Richmond Partnership, Inc. (GRP) has over 17 years of experience helping international firms set up in the US and has heard many of these questions before! Free initial professional advice is always available from the Partnership’s member law firms. GRP itself is not a law firm and the following does not constitute legal advice. Of course, you should always consult your own attorney to obtain legal advice.
Do I need a lawyer and how much will it cost?
In the USA, commercial lawyers are more than legal advisors; they are also business experts and can provide a wide range of advice. Starting a business in the U.S. is easy, inexpensive and can normally be achieved quickly at your lawyer’s office.
Where should I establish or incorporate my U.S. business?
Once legally established in one state, a business may trade in all the others. Where a business is established is often influenced by the state’s tax rate and business climate. Virginia and Delaware are often considered to have the most business-freindly corporate laws.
State business tax rates vary widely, ranging, for example, from a total of 9.5% in Illinois, to only 6% in Virginia (unchanged since 1972).
Each U.S. state has its own laws which may vary markedly in their business “friendliness.” For example, Virginia limits punitive damages for personal injury at $350,000, but California has no such limit.
So the state in which you incorporate will have a direct bearing on your company’s taxation and legal exposure. Choose carefully. You may also want to review www.forbes.com to obtain an independent view of which U.S. state is ‘Best for Business’.
Should I not bother establishing a U.S. company?
Establishing a legal business entity in the USA shows your American customers you mean business. It also enables you to open a US bank account, rent or buy premises and employ people if you wish. A U.S. telephone number is essential too, as American customers are very unlikely to ring overseas for service support. Americans want to buy from a US based business and ideally hear a local accent when they call!
Incorporating will give your business legal protection (varies with entity structure) and in many cases, also keep your financial liabilities in the USA. This means you will pay taxes in America, but these are generally less than in Europe. Your remaining profits can stay in the US or be easily transferred home.
How can I protect my Intellectual Property in the U.S.?
A qualified lawyer can explain the three basic forms of IP protection available in the U.S. (copyright, patent and trademark) and how to deal with trade secrets. An IP audit and appropriate registrations at federal and state levels are often recommended. The U.S. is a commercially competitive market so you do need to protect your ideas, concepts and intangible assets.
Will I need a visa to do business in the USA?
As a national of one of the EU countries, generally you can visit the USA without a visa stamp under the Visa Waiver program for up to 90 days. If you wish to work in the US and be paid by a US company, you will need a visa and you should consult a specialist visa lawyer to ensure you apply for the correct one (there are many options). Visas can also be obtained for spouses, children under 21, students and skilled employees. It is essential you consult a qualified immigration lawyer at the beginning of the process and provide all the facts. The USA is rightly very careful concerning who it allows into its borders and although somewhat bureaucratic, the process of visa application is transparent and very thorough.
How do I avoid getting sued in the U.S.?
The U.S. is a litigious country but a few simple steps will provide significant protection if your business is sued. You are recommended to incorporate your business, in most cases to achieve ‘Inc’ status with limited liability (as Ltd in the UK). As you must initially incorporate in one state, choose carefully as laws vary state by state and if you are sued, it will probably be in the state in which you are registered. GRP of course recommends you incorporate in Virginia and can explain why.
Secondly, seek IP protection and investigate appropriate levels of insurance coverage for all aspects of your business. When employing senior people, you may want to consider putting in place a contract between your company and your key employees. Overall, use your lawyer, taking them into your confidence as a key advisor to your business.
Is it worth the hassle?
The USA is still the world’s largest market and hopefully your business will thrive here. Someone once said “To do business in the USA you need a lawyer and a website.” This is generally true and although good advice costs money, it will be money well spent. Incidentally on balance, you may wish to consider a U.S. law firm with sufficient partners to cover all legal matters your business may require. A mid or large size practice will have all the necessary expertise in-house and will be able to coordinate their advice more simply.
How can GRP help me find a U.S. lawyer?
The Partnership comprises public and private sector investors. Greater Richmond’s leading law firms are investors in GRP, thereby actively supporting international businesses to set up in the Richmond metro area. These law firms include:
- Williams Mullen – www.williamsmullen.com
- McCandlish Holton – www.mccandlsiholton.com
- LeClairRyan – www.leclairryan.com
- Hunton & Williams – www.hunton.com
- McGuireWoods LLP – www.mcguirewoods.com
- Sands Anderson – www.sandsanderson.com
Of course there are many other law firms in Greater Richmond, some of whom specialize in one area of the law e.g., visas. We suggest you conduct an internet search bearing in mind your business requirements, then contact GRP who will make the necessary introductions.
Hopefully, you will visit Greater Richmond soon and can meet a selection of lawyers whilst answering any other commercial questions you may have about doing business in the USA via Greater Richmond, Virginia.