As foreign agencies and companies descend on Washington this week for the SelectUSA summit and then fan out for site visits around the U.S., one experienced Atlanta attorney has a word of advice: Do your homework, but don’t overcomplicate the investment process.
Arnall Golden Gregory LLP’s Tycho H.E. Stahl, who represents more than 130 mostly European clients including those in the automotive, aerospace, machinery-building and other manufacturing sectors, says he urges a simple change in mindset that helps investors avoid market-entry pitfalls.
“I try and advise people to approach U.S. market entry in the same manner in which an American would do it,” Mr. Stahl said.
That means doing your cross-border due diligence, but also simplifying the process by leaning on experienced advisers on tax, employment and legal matters on the ground here.
In a new video from AGG’s Global Commerce team, which Mr. Stahl co-chairs, he outlined an example of what could go wrong when relying too heavily on the traditional way of doing things.
A European client with more than a billion dollars in revenue had shipped a $10 million order to an American customer that was on the brink of bankruptcy. The seller found out the hard way that the title retention they had arranged back home in European courts didn’t translate in the U.S. legal system.
“Unfortunately we were in the position of having to explain to our client that if their customers teetered into bankruptcy, then they could not come and take their product back, but instead the product could be sold to make whole other creditors, such as banks, of their customer who had obtained security interest, which is what we use in the United States.”
[pullquote]”I try and advise people to approach U.S. market entry in the same manner in which an American would do it.” -Tycho H.E. Stahl[/pullquote]
After much wrangling, Mr. Stahl’s team was successful in recouping the $10 million, but the better outcome would have been avoiding the problem — and the waste of management time and money spent fixing it.
AGG provides clients with simple checklists to ensure minimal disruption and maximum compliance when entering the U.S., which Mr. Stahl said is generally very hospitable to foreign firms.
“A little preparation goes a long way,” said Mr. Stahl, who provides insight on about 40 panel discussions per year across Europe. “The costs are really not very different from what they will be back home, and you will save yourself vast amounts of wasted management time and legal fees to clean up what could become a mess later.”
The SelectUSA Investment Summit is being held June 10-12, with economic development organizations from across the country convening in Washington to meet with investor delegations from all over the world. Foreign companies like Samsung, Softbank, Airbus and more are among the key sponsors. Georgia is operating a booth at the event.
Learn more about the Arnall Golden Gregory Global Commerce Practice here.
See an example below of the Arnall Golden Gregory checklist for foreign investors both before and after setting up a legal entity:
tycho-checklist
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