Setting Up BusinessOperations in Silicon ValleyJanuary, 2013Richard Allan HorningSNR Denton US LLPT +1.650.798.0370M +1.41...
Our Locations                2
WE HELP THE TECHNOLOGY STARTUP GROW FROM THIS                                                3
TO THIS          4
MONEY MOVES WEST (1972) Sand Hill Road, Menlo Park                              5
Silico n Valley   C alifo rn ia   T o tal U .S.                               Q tr 1                               Q tr 2 ...
SETTING UP SHOP IN THE VALLEY   Agency   Joint Venture   Branch Office   Subsidiary     – C corporation     – Limited ...
MANAGEMENT AND OVERSIGHT   No Nationality Requirement for Officers and Directors   Directors are Not Necessarily Employe...
INVESTMENT COSTS   Creation of a DE Company Can Be Overnight   No Minimum Capital Required   Annual Franchise Fee in DE...
TAXATION   Tax Treaty   US Tax System Based on Taxation of Profits / Earnings   Transfer Pricing and International Tax ...
EMPLOYMENT   Non-Residents Need a Work Visa to be Employed in the US   Employment is Generally “At Will”   Non-Compete ...
ACCESS TO LOCAL CAPITAL   The Credit Rating System   The “Flip” as a Precondition for Local Equity Capital     – Usually...
VC CONSIDERATIONS   Team   Opportunity   Scalability   Protectibility   “Monopoly”   Exit Plan                      ...
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Brussels presentation

  1. 1. Setting Up BusinessOperations in Silicon ValleyJanuary, 2013Richard Allan HorningSNR Denton US LLPT +1.650.798.0370M +1.415.412.4479Skype: Richard_Allan_HorningEmail: Richard.Horning@snrdenton.comWeb: www.snrdenton.com 1
  2. 2. Our Locations 2
  3. 3. WE HELP THE TECHNOLOGY STARTUP GROW FROM THIS 3
  4. 4. TO THIS 4
  5. 5. MONEY MOVES WEST (1972) Sand Hill Road, Menlo Park 5
  6. 6. Silico n Valley C alifo rn ia T o tal U .S. Q tr 1 Q tr 2 1995 Q tr 3 Q tr 4 Q tr 1 Q tr 2 1996 Q tr 3 Q tr 4 Q tr 1 Q tr 2 1997 Q tr 3 Q tr 4 Q tr 1 Q tr 2 1998 Q tr 3 Q tr 4 Q tr 1 Q tr 2 1999 Q tr 3 Q tr 4 S ilic on V alley Q tr 1 Q tr 2 2000 Q tr 3 Q tr 4 Q tr 1 Q tr 2 2001 Q tr 3 Q tr 4 Total C alifornia Q tr 1 Q tr 2 2002 Q tr 3 Q tr 4 Q tr 1 Total U .S . Q tr 2 2003 Q tr 3 Q tr 4 Q tr 1 Q tr 2 2004 Q tr 3 Q tr 4 VC INVESTMENTS BY REGION (1995 – 2006) Q tr 1 Q tr 2 2005 Q tr 3 Q tr 4 Q tr 1 20066
  7. 7. SETTING UP SHOP IN THE VALLEY Agency Joint Venture Branch Office Subsidiary – C corporation – Limited Liability Corporation 7
  8. 8. MANAGEMENT AND OVERSIGHT No Nationality Requirement for Officers and Directors Directors are Not Necessarily Employees of the Local Company The Board Can Meet Anywhere, Including CyberSpace All Corporate But Elections Can Be By Written Consent [Maybe Even Elections] 8
  9. 9. INVESTMENT COSTS Creation of a DE Company Can Be Overnight No Minimum Capital Required Annual Franchise Fee in DE as Low as $75 Qualification in California Tax ID and Employer ID Bank Account General Liability Insurance 9
  10. 10. TAXATION Tax Treaty US Tax System Based on Taxation of Profits / Earnings Transfer Pricing and International Tax Planning Federal Corporate Tax Rate on Profits (15%, 25%, 34%, 39%, 35%) Federal Tax on Dividends to Parent (15%) Federal “Partnership” Tax (35%) 10
  11. 11. EMPLOYMENT Non-Residents Need a Work Visa to be Employed in the US Employment is Generally “At Will” Non-Compete Clauses Generally Unenforceable Employees Generally Expect Equity Participation Plans a/k/a Stock Options 11
  12. 12. ACCESS TO LOCAL CAPITAL The Credit Rating System The “Flip” as a Precondition for Local Equity Capital – Usually Has Tax Consequences for Foreign Shareholders Acquiring the DE Stock, But Careful Planning May Minimize the Hit – Local Equity Capital Will Generally be in the Form of Preferred Stock – Local Capital Usually Implies Board Seats and Restrictions on Complete Freedom to Operate Without the Consent of the Investors – The “Term Sheet” 12
  13. 13. VC CONSIDERATIONS Team Opportunity Scalability Protectibility “Monopoly” Exit Plan 13
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