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Inbound Structuring and Planning

Inbound Structuring and Planning

Who?

Companies planning expansion into the United States are faced with a plethora of business and tax issues. While some of these issues can be dealt with as they arise, a number should be reviewed, researched and decided prior to entering the US market.

NOTE: similar issues should be addressed by US companies looking to expand overseas.

Why?

Structuring

How a company is structured (type of entity and ownership thereof) can have a tremendous impact on the taxation of the entity and the cost of profit repatriation. Additionally, the complexity of tax compliance and reporting is determined based upon the type and ownership of the entity.

What?

Here is a checklist of the inbound issues which should be addressed (more detailed information on each of these issues is available):

Determine Level of US Business Presence
Seek Input/Assistance from Local Professional Advisors (Accountants, Tax Advisors, Attorneys, Etc.)
Choice of Entity and Entity Ownership (Structure)
State of Incorporation/Formation
Determine Tax and Accounting Year-End
Determine Corporate Officers
Determine Board Of Directors
Engage a Registered Agent for State Representation
Registration for a Federal Identification Number (EIN)
Office Location
State(S) in Which to Obtain a Certificate of Authority to Do Business
Register for State Payroll Tax, Sales Tax and Income Tax
Determine if Products/Services are Subject to State Sales Tax
Review Workers’ Compensation Insurance Requirements
Review General Insurance Needs
Engage a Payroll Service Company for US Payroll
Determine Fringe and Welfare Benefits to Offer US Employees
Discuss Global Mobility Issues (See Prior International Tax Planning Month Article) for Any Home Country Employees to Be Seconded to the US
Obtain Work Visas for Non-US Employees
Consider Employee vs. Independent Contractor Status – Federal and State Rules May Be Different
Determine “Nexus” (I.E., Physical or Economic Presence) in Each State According to Each State’s Rules
Open a Bank Account with Federal EIN and State Formation Document
Determine Capitalization (Debt vs. Equity Amounts)
Determine if Business Licenses are Needed
Review E-Commerce Concerns
Establish Transfer Pricing Policies for Intercompany Transactions
Review Technology (and Other Intellectual Property) Transfers and Licenses
Determine if Financial Statements (Audited, Reviewed, Compiled) are Required – Note, The US Government and States Do Not Require Financial Statements

When?

The best time to get started through this extensive (and not necessarily complete) checklist is during the initial planning stages of international expansion.

Next Steps

At Withum, we can help you get started on your inbound (or outbound) journey as your business expands cross-border. Do not hesitate to call on the International Services experts at Withum with any questions by filling out the form below.

Withum’s International Services

To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

How Can We Help?

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