Establishing a business presence in Texas: Considerations for foreign entrepreneurs. Presented at Galicia Week in Houston.

1. Establishing a Business
Presence in Texas
… Considerations for Foreign Entrepreneurs
presented by:
Edgar Saldivar
BoyarMiller
832.615.4276
esaldivar@boyarmiller.com
Galicia Week in Houston September 21, 2012

2. Why Texas (and Houston, in Particular) Matters
Top Reasons:
 Houston Ranked No. 1 in U.S. for business
 Largest medical center in the world
 America’s largest foreign tonnage port
 Oil & Gas industries – Energy capitol of the world
 America’s “Coolest” City

3. Forming an Entity
Choosing the Form of Entity
 1st step is to select the type of entity that best suits the client’s needs
― Tax considerations
― Most frequent choice: corporation
― Other common choice: limited liability company
Picking a State to form the New Entity
 Corporations, limited liability companies and other types of entities are
created under the laws of individual states within the United States;
there are no U.S. entities, only state entities
― File appropriate qualification documents within those states (like
Delaware)
― However, business and corporate laws of other states (like Texas)
have become more sophisticated.
― International clients increasingly forming entities under Texas law

4.  Other steps in the formation process
 Preparing the governing documents of the entity
 Determining the entity’s management and governance structure
 Obtaining an Employer Identification Number from the Internal Revenue
Service
― Crucial in order to open a U.S. bank account in the name of the
new entity and to begin to conduct business
 Officers and Directors
 Entities formed in one of the various jurisdictions in the US have a board
of directors (elected by the shareholders) and officers elected by the
board of directors
 The board establishes policy and strategy and is required to approve
material agreements entered into by the company
 Officers run the day-to-day business of the company
Forming an Entity

5. Finding a Home
 Some offshore companies first begin doing business
in the U.S. as a result of acquiring a company already
doing business in the United States.
 In those situations, the offshore company will often have offices,
manufacturing facilities and warehouses all in place as they begin
operations in this country.
 Other offshore companies start small, with no
existing offices or employees
 These companies may elect to lease an office or other facilities.
 May require a commercial real estate broker to help locate the desired
property and negotiate the general components of the lease transaction.
 May also require an attorney to review and negotiate the lease
document.

6. Staffing the Company
 Consultants or Employees
 The IRS has listed a number of factors to assist employers in
properly classifying their staff.
 Both attorneys and accountants can provide assistance in
properly classifying staff members for IRS purposes
 U.S. or Foreign Staff
 When these workers are not U.S. citizens or have not otherwise
obtained the right to work in the United States, the services of an
immigration attorney will be required to assist with proper
credentials
 Texas is an “At-Will” State
 Covenants Not to Compete
 These agreements must be carefully drafted by an attorney

7. Licenses and Permits
 Most businesses will require one or more licenses, depending upon
the type of business being conducted
 To make matters more complicated, such licenses or permits may be
issued from the federal, state or local governments, depending upon
the type of license or permit
 You should consult an attorney to determine which licenses or
permits are required in your business

8. Payroll and Benefits
 Businesses just starting out in the U.S. may
want to offer benefits such as medical
insurance, dental insurance and 401k
retirement programs, but the cost involved of
providing those benefits when there are just a
few employees may not be reasonable.
 In those instances, we often refer our clients to
third party providers such as Insperity
(www.insperity.com) or Paychex
(www.paychex.com).
 Many mid-sized companies will use the
services of a third party provider or a
professional employer organization to provide
payroll services and/or benefit plans.

9. Insurance
 Of course, almost all companies need general
liability insurance and may require other types
of insurance such as:
 property and casualty
 directors and officers liability insurance
 worker’s compensation.
 If your broker or agent representing the parent
can provide insurance in the U.S., it may be
best to go through the parent company’s
agency
 However, if they cannot or do not seem to have
the required expertise, there are any number of
local agents who have experience in working
with internationally based clients.

10. Texas: Land of Opportunity for International Business

11. Questions?
Edgar Saldivar
BoyarMiller
832.615.4276
esaldivar@boyarmiller.com
http://www.linkedin.com/in/saldivar https://twitter.com/edgar_saldivar