The response to our post on setting up a U.S. subsidiary of a foreign company demonstrates there is great interest in this topic. Here is some additional information.Determine Your Expectations
For a foreign entity, the thought of entering the huge U.S. market can be very enticing. But pursuing that market can also create a financial hardship if not done correctly. That's why, as we covered last time, you'll have to follow a specific set of parameters, including (in most cases) choosing a subsidiary over a branch office and setting up an LLC.
The most important step in setting up a U.S. subsidiary is to determine exactly what you hope to accomplish. Consider questions like these:
- If you're selling a product, have you done the research to determine who your established U.S. competitors are?
- Does your product meet U.S. safety standards?
- Can you simply export your product to the United States from your existing manufacturing facility, or do exorbitant tariffs make it more cost-effective to build a manufacturing facility domestically?