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May 17th, 2012

Overcoming the Legal Barriers to Opening Your US Operation

Due to the high level of response regarding our last blog entry Why Sales Outsourcing is the Best Way for Companies to Expand into the US, we decided to post a follow-up entry.  In the last posting we talked about the operational benefits of outsourcing your US sales and marketing.  However, your decision to enter the U.S.  also creates significant legal issues which must be successfully resolved before you open the doors.  Dealing with the federal government, fifty States and even local entities may require the assistance of lawyers and/or accountants, thereby subjecting your company to potentially high upfront, legal and accounting costs.

Any decision to open your own US Sales office must be thoroughly evaluated.  In your due diligence phase, it is critical that you understand the laws and regulations that will apply to your business.  Overcoming these legal barriers to entry is not only time-consuming but can be quite expensive.

Some of the legal issues that must be examined include the following:

  1. Will you set up a separate US business entity?
  2. What are the tax consequences of creating a separate U.S. operation?
  3. If you create a U.S. business entity, will it be a corporation, a Limited Liability Company (“LLC”), or some other entity ?
  4. Which state will you incorporate your business in?
  5. How do you go about receiving a federal tax ID?
  6. How do you register to do business in the states you are planning to conduct business in?
  7. What are the State employment laws? Minimum wages? Overtime rules?
  8. Are you required to provide Health insurance?
  9. Are you required to provide disability insurance?
  10. What are the requirements for workers compensation and unemployment benefits?

All of these questions are serious that you will need to address.  Should you decide to utilize a sales outsourcing company, these issues will be the responsibility of the US based sales and marketing outsourcing company that you choose.

March 18th, 2012

Why Sales Outsourcing is the Best Way for Companies to Expand into the US

All international companies who wish to enter the US market recognize that there are significant barriers or roadblocks.  Many companies believe that their only option is to open a US office.  Few companies understand that a better option is to outsource their US operations and sales.  While both options can be a successful way of bringing your international products and services into the US market, outsourcing is by far the more cost effective and quickest to implement.   Let’s dig a little deeper into why this is.

How does an international company open a US office? An international company would need to rent or purchase office space, relocate key employees to the US, learn the US business mentality, hire support\ staff, train its personnel, and create infrastructure (phone, internet, data center, etc.).  All these necessary steps can be time consuming and expensive but may ultimately prove effective.

Now let’s take a look at what it would take to expand into the US market through outsourcing. The international company can hire a US based sales company that already has an established location, has qualified sales personnel, knows the US mentality and has the infrastructure in place.  The International company can train the project manager from the outsourcing company who will then train the sales force.  This approach can avoid the high costs and learning curve that are associated with opening a US based office.