Bringing Your Startup to the U.S.

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

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

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

5tech.friedfrank.com / @friedfranktech

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% 564,714
2 Japan 11.67% 309,383
3 Germany 10.27% 272,262
4 Canada 9.85% 261,133
5 France 8.36% 221,724
6 Netherlands 4.91% 130,075
7 Ireland 4.82% 127,674
8 Switzerland 4.75% 126,007
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

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 & Jacobson LLP
12

US Expansion: 5 key legal considerations
Consider your corporate structure
13
Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com
or by emailing tech@friedfrank.com

IP: Trademarks, patents, NDAs
14

Create US terms and conditions
15

Understand the litigation landscape
16

Don’t overpay or underutilize lawyers
17

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

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

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 SMEs moving to Florida.

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.

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.

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.

Glenn McCrae
Chief Strategy Officer
Early Growth Financial Services
@EarlyGrowthFS

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

• 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

• 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

• 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

• 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

Coming to America: The Legal Basics
31
“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 upon request. Please
email tech@friedfrank.com.

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/robertbenparkinson
http://london.usembassy.gov
Glenn McCrae
Early Growth Financial Services
E: gmccrae@earlygrowthfinancialservices.com
P: 415.320.5753
L: www.linkedin.com/in/glennmccrae
www.earlygrowthfinancialservices.com
@EarlyGrowthFS

Bringing Your Startup to the U.S.

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