Doing Business in the US – Basic Considerations for International Companies

In these challenging economic times, international businesses need to find new markets for their products and services. Although some developing countries are showing signs of rebounding, many companies from our traditional trading partners might revisit […]

Doing Business in the US - Basic Considerations for International Companies

In these challenging economic times, international businesses need to find new markets for their products and services. Although some developing countries are showing signs of rebounding, many companies from our traditional trading partners might revisit the U.S. as a market. Even in the midst of a severe recession and with the importance of a growing economy, the US remains a safe place and a relatively prosperous and established market.

International companies do business in the U.S

Fundamental questions for international companies who want to do business in the U.S. boils down to “what do I need?” A business person who is thinking of doing business in the US certainly needs to assess the market demand for his product or service and the sales and distribution channels. If this research shows an opportunity, a business needs to determine where to find its business.

One thing that often surprises international visitors even experienced is the geographical breadth of the United States. For example, the state of Texas is much bigger than Germany, one of the largest countries in Europe. International companies should consider placing U.S. operations in an area that is convenient for the head office. For example, companies in Europe should consider placing U.S. operations. they are in or close to cities with easy air connections to Europe.

Time Differences

Companies must also consider time differences in relation to where they are. For example, all things being stated the same, European companies should consider placing their US operations in the Eastern time zone in the US, where a time difference of five to six hours allows communication during regular working hours with the United Kingdom, Ireland, Scandinavia, and Continent. Conversely, a nine-hour time difference between central Europe and the West Coast can cause problems. Of course, Asian companies might prefer to place their US operations on the West Coast for the same reason.

Even though I’m arguably biased, Georgia should be on the shortlist, with the world’s largest airport, several daily flights to Europe and other international destinations, two deep-sea ports (Savannah and Brunswick), a strong rail and road transportation system, and a system a strong university led by Georgia University in Athens and Georgia Technology in Atlanta.

Atlanta, a host of the 1996 Summer Olympics, has a strong international business community. Adding to the moderate climate and attractive lifestyle, it is not surprising that many international and domestic companies, such as Kia and NCR, have chosen to search or move facilities or headquarters in Georgia.

Involving Professional Assistance

Once a decision has been made on where to look, a business will need to involve professional assistance to build business operations in the U.S. Many small businesses seem to think that all they need is an accountant. Of course, the international business established in the U.S. needs a good accounting firm, preferably with international tax experience.

Companies must also use experienced advisors, preferably before starting a business. In this case, please remember one rule that is almost universal about legal services: It is cheaper to handle problems properly on the front end (like managing a business properly) than to try to fix it on the back end. In addition to helping to manage the business properly, a lawyer must be involved in helping companies draw up contracts and determine terms and conditions of sale that will help minimize the risk of disputes with customers or suppliers.

Involving An Experienced Insurance Broker

The company must also involve an experienced insurance broker. It’s no secret that the U.S. more agile than other countries. Liability insurance is the key to minimizing litigation risk for product liability and other claims. A good insurance broker with international experience can help develop a logical insurance program and risk management strategy.

Summary

To sum up, make sure that there is a market for your product or services in the U.S. Understand that the U.S. is a large country. Choose a geographic location that makes it easy to communicate with your home office and to sell into the parts of the U.S. that best fit with your products or services. Finally, do not overlook the need for professional services in three key areas. Make sure that you have:

  • An experienced accountant, particularly one with international tax experience.
  • An experienced lawyer, preferably one experienced in dealing with international companies.
  • An experienced insurance broker experienced in dealing with international insurance issues.