Establishing a Business Presence in Texas

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Establishing a business presence in Texas: Considerations for foreign entrepreneurs. Presented at Galicia Week in Houston.

Establishing a business presence in Texas: Considerations for foreign entrepreneurs. Presented at Galicia Week in Houston.

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  • 1. Establishing a Business Presence in Texas … Considerations for Foreign Entrepreneurs presented by: Edgar Saldivar BoyarMiller 832.615.4276 esaldivar@boyarmiller.com Galicia Week in Houston September 21, 2012
  • 2. Why Texas (and Houston, in Particular) Matters Top Reasons:  Houston Ranked No. 1 in U.S. for business  Largest medical center in the world  America’s largest foreign tonnage port  Oil & Gas industries – Energy capitol of the world  America’s “Coolest” City
  • 3. Forming an Entity Choosing the Form of Entity  1st step is to select the type of entity that best suits the client’s needs ― Tax considerations ― Most frequent choice: corporation ― Other common choice: limited liability company Picking a State to form the New Entity  Corporations, limited liability companies and other types of entities are created under the laws of individual states within the United States; there are no U.S. entities, only state entities ― File appropriate qualification documents within those states (like Delaware) ― However, business and corporate laws of other states (like Texas) have become more sophisticated. ― International clients increasingly forming entities under Texas law
  • 4.  Other steps in the formation process  Preparing the governing documents of the entity  Determining the entity’s management and governance structure  Obtaining an Employer Identification Number from the Internal Revenue Service ― Crucial in order to open a U.S. bank account in the name of the new entity and to begin to conduct business  Officers and Directors  Entities formed in one of the various jurisdictions in the US have a board of directors (elected by the shareholders) and officers elected by the board of directors  The board establishes policy and strategy and is required to approve material agreements entered into by the company  Officers run the day-to-day business of the company Forming an Entity
  • 5. Finding a Home  Some offshore companies first begin doing business in the U.S. as a result of acquiring a company already doing business in the United States.  In those situations, the offshore company will often have offices, manufacturing facilities and warehouses all in place as they begin operations in this country.  Other offshore companies start small, with no existing offices or employees  These companies may elect to lease an office or other facilities.  May require a commercial real estate broker to help locate the desired property and negotiate the general components of the lease transaction.  May also require an attorney to review and negotiate the lease document.
  • 6. Staffing the Company  Consultants or Employees  The IRS has listed a number of factors to assist employers in properly classifying their staff.  Both attorneys and accountants can provide assistance in properly classifying staff members for IRS purposes  U.S. or Foreign Staff  When these workers are not U.S. citizens or have not otherwise obtained the right to work in the United States, the services of an immigration attorney will be required to assist with proper credentials  Texas is an “At-Will” State  Covenants Not to Compete  These agreements must be carefully drafted by an attorney
  • 7. Licenses and Permits  Most businesses will require one or more licenses, depending upon the type of business being conducted  To make matters more complicated, such licenses or permits may be issued from the federal, state or local governments, depending upon the type of license or permit  You should consult an attorney to determine which licenses or permits are required in your business
  • 8. Payroll and Benefits  Businesses just starting out in the U.S. may want to offer benefits such as medical insurance, dental insurance and 401k retirement programs, but the cost involved of providing those benefits when there are just a few employees may not be reasonable.  In those instances, we often refer our clients to third party providers such as Insperity (www.insperity.com) or Paychex (www.paychex.com).  Many mid-sized companies will use the services of a third party provider or a professional employer organization to provide payroll services and/or benefit plans.
  • 9. Insurance  Of course, almost all companies need general liability insurance and may require other types of insurance such as:  property and casualty  directors and officers liability insurance  worker’s compensation.  If your broker or agent representing the parent can provide insurance in the U.S., it may be best to go through the parent company’s agency  However, if they cannot or do not seem to have the required expertise, there are any number of local agents who have experience in working with internationally based clients.
  • 10. Texas: Land of Opportunity for International Business
  • 11. Questions? Edgar Saldivar BoyarMiller 832.615.4276 esaldivar@boyarmiller.com http://www.linkedin.com/in/saldivar https://twitter.com/edgar_saldivar