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Three opportunities for doing business in the U.S.
By Mark Rapson, CPA, CGMA
If you are considering creating a U.S. subsidiary, now may be a good time to do so. In fact, believe it or not, the COVID-19 environment has enhanced the U.S. marketplace. In this article, we will highlight three opportunities and discuss why 2020 and 2021 may be the years to move forward with your U.S. marketplace expansion objectives.
The three opportunities that have evolved over the last few months are as follows:
Increased Acceptance of a Remote Economy. When the U.S. economy shut down in March, it forced many companies, financial institutions, and government agencies to adapt to virtual environments. Now months after working in this way, organizations are more open to transacting digitally. Businesses that had or switched early to cloud applications, integrated systems, and communication platforms like Zoom and Microsoft Teams were still able to communicate and transact business during this uncertain time. This daily reinforcement of online collaboration technology to perform in-person meetings and transactional work further strengthened the mindset to handle business in a geographically unrestricted manner. As a result, geographical distance does not matter as much as it once did. Plus, the availability and sophistication of today’s meeting software makes it plausible for foreign companies to launch virtually without having to travel. This saves money and time—both precious resources for new organizations.
A Saturated Labor Market. Pre-COVID, staffing and recruiting challenges were very much a struggle for international organizations looking to expand into the U.S. marketplace. Post-COVID, high U.S. unemployment continues to strain the U.S. economy. However, businesses should look at this as a silver lining. As companies layoff or furlough talent – midsize and emerging companies should increase their recruiting efforts to capture these highly-skilled employees who were not available pre-COVID. As the trajectory of unemployment decreases, the labor market will get tight again so do not wait to take advantage of this rare opportunity to hire talented U.S. employees.
Favourable Governmental Regulations For Business Set-Up. The United States is ranked 6 among 190 economies in the ease of doing business, according to a recent World Bank annual ratings release. Setting up a “virtual” organization in the U.S. can help your business expand into the #1 largest economy in the world. The process for setting-up a U.S. subsidiary is generally very efficient, cost effective and does not require a lengthy process as with many other countries. For many organizations, it can take two weeks or less to have your virtual company organized and ready to transact business. In addition, many states and local jurisdictions offer financial incentives to investors who are in certain industry sectors or establish their business in a specific geographic location.
This year and beyond will be forever changed in how we all do business domestically and globally. Don’t let the talk of a “new normal” intimidate you. Now is a prime time to leverage these opportunities in the U.S. business environment. How can you act fast? More international organizations are now turning to U.S. based outsourced business service firms as a one-stop shop to handle their back-office and compliance needs. Many offer services such as: accounting, tax, financial reporting, compliance and even human resource assistance for their U.S. subsidiaries. By delegating these tasks to professionals experienced in U.S. compliance, your business will be able to not only save money, reduce investment capital but also save time and ensure compliance with local laws and regulations. These efforts combined with leveraging the above opportunities can be used to substantially advance your business objectives to grow your U.S. marketplace presence now.
ABOUT MARK RAPSON, CPA, CGMA: He is a Director with BlueStone Services and its parent company KatzAbosch. He has nearly 20 years of experience helping clients deliver world-class compliance in their organisations. Mark works with a range of US subsidiaries of international organisations from assisting them in establishing a US presence to support for back-office accounting, tax and human resource functions.
ABOUT BLUESTONE SERVICES: An outsourced consulting firm that provides U.S. subsidiaries of foreign corporations with a tailored solution to bookkeeping, accounting, and management reporting in addition to human resource assistance. Our extensive experience with organizations in the U.K. allows you to get set up quickly and ensure compliance with U.S. federal and local regulations. For more information visit: www.bluestonesvc.com