April 6, 2017

Why Foreign Business Owners Still Love the United States
Yelena Epova and Karen Weinstock

 

Speaker 1:                        It's time for In Process: Conversations about Business in the 21st Century with Evelyn Ashley and John Monahon. Presented by Trusted Counsel, a corporate and intellectual property law firm. For more information, visit trusted-counsel.com. Now, with In Process, here are Evelyn Ashley and John Monahon.

Evelyn Ashley:                   Hello and welcome to In Process: Conversations about Business in the 21st Century. I'm Evelyn Ashley.

John Monahon:                I'm John Monahon.

Evelyn Ashley:                   We're partners in Trusted Counsel, a corporate and intellectual property law firm. Our topic today is essentially doing business in the United States from the perspective of the non U.S. business. However, we think our conversation today has broader reach to include U.S. businesses, since we're going to touch on a number of informational areas that are both educational and helpful to any business whether they're in the U.S. or thinking about setting up an operation here, or in any other jurisdiction. Of course our time is limited and it'll be impossible for us to cover everything you know. We hope to provide you with a framework for considering the key elements every business needs to know. Our guests today are experts from a number of perspectives. First, they're subject matter experts that deal with our topic every day. Second, both of these women immigrated to the United States. I'd say there are only a few guests who could be more knowledgeable about our topic this week.

John Monahon:                Let me introduce you to our guests and friends. Yelena Epova and Karen Weinstock of Weinstock Immigration Lawyers. Yelena is the partner in charge of HAW's International Services. She specializes in advising domestic and international companies on international tax issues and tax planning strategies with regard to inbound and outbound operations. Yelena is an active member in many professional organizations, including the American Institute of Certified Public Accountants, where she recently served on the task force that reviewed proposed treasury regulations on transfer pricing. The Georgia Society of Certified Public Accountants where she participated in the leadership development program, and Baker Tilley International where she chaired the North American International Tax Committee for six consecutive years.

                                                Yelena was born in Saint Petersburg, Russia. Yelena has a master's degree in engineering from the Technological College of Leningrad. Upon her arrival in the United States, she continued her education in Accountancy at Georgia State University. Yelena has written for numerous publications. She is a regular contributing writer to Global Atlanta on international tax issues. She is also a frequent speaker at many international and domestic seminars, including those pertaining to business entering the U.S. market.

Evelyn Ashley:                   Karen Weinstock is the managing attorney of Weinstock Immigration Lawyers, and specializes in solving complex immigration problems and providing case strategy and management for organizations and individuals. Karen's prior experience in corporate law and her business acumen enables her to better serve the particular needs of multinational corporations, organizations, and investors. Her expertise is in representing U.S. and international companies in the technology and healthcare industries, as well as universities, researchers, physicians, and investors with their immigration needs.

                                                She's the author and editor of the H1B book published by Immigration law Weekly, and is a speaker on immigration law topics in conferences around the world. Karen is originally from Israel and immigrated to the United States in 2000. She's fluent in English, Hebrew, and Spanish. Her genuine passion for immigration law is a direct result of her personal experience as an immigrant to the U.S., and extensive community involvement.

                                                She's driven by her own personal hardships immigrating to America to help her clients ease their transition here. Above all, Karen strives to provide her clients with the tools and resources they need in order to pursue their American dream and achieve the best possible results for each client. Yelena and Karen, welcome to the show.

Yelena Epova:                    Thank you.

Karen Weinstock:            Thank you.

Evelyn Ashley:                   I have a funny kind of perspective on this topic. Twenty years ago, which is something that I don't really like to admit to, I participated as a speaker in a conference in Sao Paolo, Brazil that was sponsored by the Brazilian Economic Development Corporation and the U.S. Chamber of Commerce. They invited over 20 countries to come and speak to an audience of Brazilian business owners and investors about getting set up and, setting up their foreign operations. Of course, the speakers were all lawyers. It was really exciting to me to be invited to participate with this group, and I had for me, an awesome topic, which was intellectual property protection in the United States, which coming from the U.S. which, sorry, but I call the technology hub of the world, I have felt like I had just an amazing thing to be able to address for the group. However, I was speaking on the third day of a three-day conference, and so I had the opportunity, maybe the pleasure, maybe not so much, of actually sitting in on the speeches of all the prior lawyers. Quite frankly, what a downer the whole thing was because lawyers are negative thinkers. What were they talking about? They were talking about, "Oh my God, product liability claims. Oh my God, it's going to cost you so much money to do this. Oh my gosh, it's going to," you know you have so many obstacles in your place. So many complexities to actually do this, to set this up. I was so disillusioned by the time I gave the speech that I actually had to apologize to my audience because I was like, "Please, please don't be disillusioned by all of this negative speaking. The U.S. is still a fabulous place to come and set up your operation."

                                                The reality is, the United States is still one of the best places in the world to set up operations. The World Bank actually rates 189 countries a year, and this year we are rated number eight in the world for ease of setting up your operations. It's really not a bad number. Curiously, New Zealand is number one, which still an English speaking country I suppose, and maybe that makes it easier, I don't know, but it is a lot smaller. Doesn't quite represent the market.

John Monahon:                They only set up countries for Lord of the Rings.

Evelyn Ashley:                   Oh yeah. It's probably film production, you know? There's a lot of that going on there. Karen and Yelena, though, since both of you came from other countries, tell us some of the things that attracted you to the United States. Yelena?

Yelena Epova:                    I lived in the Soviet Union, so I don't think I need to say anymore, right? There's a lot of things attracted me at that time, just to leave the country. Without kidding, I'm Jewish so and being a woman, and Jewish woman, I just finished college in Soviet Union at the time. There were not many opportunities for me. I wanted to leave for that reason, of course. Also, it was not an easy life in my country, unfortunately. As much as I like the city that I was born in, Saint Petersburg, and I still think it's the most beautiful city in Europe, at least, the life wasn't great. I came for opportunities and also freedom of speech. I know it's kind of cliché, but it's true.

Evelyn Ashley:                   How about you, Karen, what were your thoughts?

Karen Weinstock:            I had graduated from law school in Israel and many, many years ago. After I graduated, there is a mandatory kind of training, internship here that you basically have to work under another lawyer and practice law under supervision. During that year I said to myself, "I don't want to practice law in Israel." It was either throwing away my education or trying a different opportunity. I had a relative in the United States and I figured oh well, I could speak English and let's try it. That's basically what attracted me here, but things were very, very different than I had anticipated, I can tell you.

Evelyn Ashley:                   Was it easy for each of you to actually immigrate?

Yelena Epova:                    For me, it wasn't that easy because you were considered enemy of the state when I left. I had to give up my citizenship and pay for it, too. Pay for giving it up. It was a whole process. You had to apply, you had to have an invitation and the state in Europe for almost four months, which sounds great if you're actually vacationing there, but if you live in refugee camps, it's a little bit different experience. I wouldn't want to repeat that.

John Monahon:                You know I'm feeling more patriotic by the moment, the more [crosstalk 00:09:12]-

Yelena Epova:                    You should.

John Monahon:                Very

Yelena Epova:                    You should.

John Monahon:                More thankful every second.

Evelyn Ashley:                   Proud to be from the U.S. How about you, Karen? Was it easy when you made the decision that you wanted to stay here?

Karen Weinstock:            The decision itself to move here was pretty much easy. The actual implementation of it was not so much.

Evelyn Ashley:                   Right.

Karen Weinstock:            I had a lot of hardships going on and I was very naïve and I thought it was going to be super easy and no problem, but the systems are very different. The culture is very different. The language, even though you speak it you don't always know the minute when you are actually speaking in a day to day business and was, "Okay, let's go for lunch." What does that mean? It can mean a lot of things.

Evelyn Ashley:                   How about you, Yelena, did you find a lot of cultural challenges when you came?

Yelena Epova:                    I wouldn't call them challenges. I would just, well first of all I was amazed by the fact that there are so many immigrants here. Everybody had an accent. I guess I shouldn't say first of all, the first of all I was amazed that I don't speak English, because I thought I do when I came here because I did have it in school, but I just didn't realize how limited my knowledge was. Also, American English just sounded like a different language to me.

Evelyn Ashley:                   Isn't that interesting.

Yelena Epova:                    I was very surprised about how welcoming everybody was. I think some of it is also coming to the south. I understand that maybe if I came to New York where there are another one million Russians living-

Evelyn Ashley:                   Might not have been so friendly-

Yelena Epova:                    Yeah, maybe they wouldn't be so welcoming, but here I felt very much welcome. I never felt really foreign.

Evelyn Ashley:                   Interesting.

John Monahon:                Was most of what you knew, is that from TV shows or pop culture or did you have a crash course before you came over, somebody said, "You've got to know this."

Yelena Epova:                    It was more the word of mouth. [inaudible 00:11:16], we didn't have soap operas or whatever. What I knew through TV wasn't very welcoming, I should say. Yeah, but I already had relatives living in Atlanta who moved here a little bit before us. Most of the things I knew, I knew from them. I tend to believe them a little bit more than I believed Soviet Union TV.

Evelyn Ashley:                   We're going to take a break and when we come back we're going to talk a little bit about what was surprising and exciting and maybe not so exciting for both of you when you arrived.

Speaker 1:                           Now, back to In Process: Conversations About Business in the 21st Century, with Evelyn Ashley and John Monahon. For more information, visit trusted-counsel.com.

Evelyn Ashley:                   Welcome back. When we departed, we were talking a little bit about differences. Karen, during the break you made an interesting comment about not focusing so much on the differences. Want to expand on that?

Karen Weinstock:            Yeah. Of course in any relocation to another country or even within a country, there are different regions, right? You can focus on what's different and what's hard and oh my gosh, and you'll have a list from here until tomorrow. At the same time, the best thing to overcome cultural differences, culture shock, any transition to another region or country is really to focus on what's the same or what the similarities are between the culture that you're entering and the culture that you're coming from and build a bridge based on that. For example, the Israeli culture and originally the New York City culture where I originally came to the United States, I stayed in New York City. They're both very blunt cultures. You just spit out whatever is in your mind or whatever you want to say, you just spit it out. I used that, for example, as one of the bridges to get acclimated to the U.S. culture and to build connections with people. People are people everywhere, and so you have to understand those things and also have the right team that can guide you in how to bridge those gaps. Instead of focusing on what's different, which is important, hone those skills that are similar between the two cultures.

Evelyn Ashley:                   Interesting. It sounds a little bit like I think for as long as the U.S. has been having people coming from other places, it seems like the easiest way perhaps to get encultured is to actually be in an environment where there are people that can actually understand your background a little bit and help you through the thicket, if you will, of what's new.

Karen Weinstock:            Right, right. Having other ex-pats and people, especially from your country, from your culture, is very helpful if they can guide you and be with you along the way. Of course not everybody has that as an option. If you don't have that, then obviously a team of experts, people who moved from similar countries or from similar regions should also help you. There's really, I find especially in Georgia and in the south, there is really a welcoming environment and people are really happy to help you, especially those who have come from other countries.

Evelyn Ashley:                   For both of you, from your work experience, why do foreign business owners set up operations in the U.S.?

Yelena Epova:                    Obviously, the first thing is the size of the country, size of the market, right? To have access to the U.S. market, it's tremendous. A lot of companies that are successful, the U.S. operations end up being much bigger than their foreign parents operations.

Evelyn Ashley:                   Interesting.

Yelena Epova:                    I think that's the main reason.

Evelyn Ashley:                   Educated workforce, I mean is that a reason or generally not so much?

Yelena Epova:                    Well yeah, that too. First thing they want to make sure they're able to sell, right?

Evelyn Ashley:                   Right.

Yelena Epova:                    The demand is pretty big here.

Evelyn Ashley:                   It is a huge market. Probably the other idea is kind of as opposed to Europe where you have your market share built in perhaps one country, if you move on to another, which you can do easily but you have language barriers and you have cultural barriers, which that might be true here, to some degree but not so much.

Yelena Epova:                    As you said at the beginning, it's a great country from the ease perspective, to open the business. It's pretty easy process.

Evelyn Ashley:                   What are some of the questions that you think business owners actually ask themselves or ask advisors at the point that they are thinking about coming to the U.S.?

Karen Weinstock:            I think a lot of the businesses that I work with, they either, like Yelena said, think about the size of the market and the size of the opportunity. A lot of times they also have customers that are existing in the United States. Either the customer or the client wants them to move here and do business with them locally, or there is another requirement where they have a way to expand in the United States with an existing client base. With that situation, a lot of the decisions are kind of already made as far as where to set up and all that. If you have only one big customer in the United States, you're probably going to set up closer to that customer.

Evelyn Ashley:                   Right. Do you see that too, Yelena? Are people, are your business clients usually already here with some level of presence and it's just a natural progression to set up an operation?

Yelena Epova:                    It depends. Sometimes they already made sales to the U.S. and they realized that they made need to have people here for I don't know, let's say support maintenance, customer relations. Sometimes they also realize that Americans still love doing business with American companies, so that's one of the reasons they would set up a U.S. subsidiary. I mean I would say maybe it's half and half, sort of. If I look at my inbound clients, half of them come with clients here already and half of them come where they haven't done business in the U.S.

Evelyn Ashley:                   From your experience, do most of them, and maybe Karen this is kind of where your area comes in, do most of them say, you know, "I'm the president of the company in a foreign jurisdiction, I'm coming to the U.S., I want to be the person who's there on the ground," or, "I want to bring my second." Is there any kind of regularity, I guess in that decision?

Karen Weinstock:            It really depends because a lot of times if the business itself is used in a way that for example there's an unstable political environment abroad and the business owner basically wants to move himself or herself and their families, then usually they would be the first person to come here.

                                                In the majority of situations, then that's not the case. Usually, they're a very successful business owner abroad and they want to keep the company abroad and the family and so forth. They're sending someone else and generally it's marketing of sales teams and sometimes the customer support to basically head or spearhead the U.S. expansion efforts. Again, but it varies from a case to case so sometimes it could be the investor or owner himself or herself that are setting up shop here.

Evelyn Ashley:                   Let's talk a little bit about the immigration process and the visas and ... We all, certainly from the U.S. side we know that immigration policy in the United States is a very provocative and hot issue. I think it probably raises questions certainly in any business owner that wants to come to the United States, wondering if it's actually possible. When we return, we'd like to talk a little bit more about what the process is there, Karen, and various different kinds of visas that are available to business owners.

Speaker 1:                           Now, back to In Process: Conversations About Business in the 21St Century with Evelyn Ashley and John Monahon. For more information, visit trusted-counsel.com.

Evelyn Ashley:                   Welcome back. When we broke, we were about to start talking about immigration policy and immigration procedure for business owners wanting to come to the U.S. Karen, can you take us through a little bit, maybe talk a little bit about the policy of the U.S., but then also give us some specifics on what a business owner would need to have or maybe what the opportunities are for them to get visas.

Karen Weinstock:            Sure, Evelyn. Basically, the political climate here is pretty much a standstill in the past four to eight years. It's really very difficult now to pass new laws in the United States because of what's called a stalemate in the Congress. It affects also other immigration policy. Our biggest problem of the immigration laws is that they are really a broken system. The system itself was designed and was basically set up in the early 1950s. The immigration law that we use now was enacted in 1952 and so it's more than 60 years old and it just doesn't work today because we have global companies that do business everywhere. We have global transition of goods and services. The law really needs to catch up to the 21st Century. Because of the stalemate in Washington, D.C., and there's a lot of fight about people that are undocumented and there's a lot of talk about illegal immigration, and so really in a very, very brief overview, the republicans, most of them oppose any immigration measures including [crosstalk 00:22:59]-

Evelyn Ashley:                   Even business-

Karen Weinstock:            Extending the legal immigration. They talk about a lot of illegal immigration but they really oppose any expansion on legal immigration on one hand. On another hand, the democrats who could probably push something that only tackles legal immigration, they don't want to do that without addressing the problem of the illegal immigration and the undocumented people that are in the United States. What happens is really a stalemate. It really hurts and affects the international businesses that want to send employees here.

Evelyn Ashley:                   Do you see a resolution to that, Karen? I mean that argument's been going on for a long, long time, hasn't it?

Karen Weinstock:            Yes, but even in spite of that we've been able to, for the majority of our foreign clients, we were able to get visas for them, for the investors, for their employees. It's not like the political system is preventing legitimate businesses. It is making it more difficult, though.

Evelyn Ashley:                   Making it more difficult by putting limits on the number of visas being granted?

Karen Weinstock:            This is one issue is limiting the number of visas, for example. The H-1B visas are limited. Those are for professional workers. The majority of the business visas that are used by either business owners, investors and employees of companies abroad are the L and e-visas, and those are not limited by number.

John Monahon:                What exactly is the L and e-visas?

Karen Weinstock:            For the L visa, the requirements are that you have an employee or an owner that has worked abroad for at least one year out of the last three years in a managerial or specialized knowledge capacity for a company that has an ownership relationship or a nexus to a U.S. company. Either a subsidiary or a parent or an affiliated company and there's specific rules on that. They're coming to the United States to have a similar managerial or specialized knowledge position, although it doesn't have to be the same position as they had abroad. The e-visa is reserved for nationalities and citizens of nationalities that have investment treaties or trade treaties with the United States. The majority of the western European countries, some of the eastern European countries and some countries in Latin America, Mexico, and then Canada.

John Monahon:                How long, what's the standard process for a visa as far as the process and the timeline? Is it something that's pretty lengthy? I imagine there's a lot of paperwork involved [crosstalk 00:25:55]

Evelyn Ashley:                   Does that have to happen, and so Karen also to kind of supplement that, to go along with that question, does this process need to happen first before a decision to come to the U.S. is made?

Karen Weinstock:            No, no. This happens after. Kind of like the timeline or how it works is first the company decides yes, they want to come to the United States. Second, they are looking for a location. Where the business would be, which city, which state, and so forth. Then after they pick the location, then the paperwork really needs to start [inaudible 00:26:30]. Then we talk about filing for the immigration paperwork. At the same time, all of the coordination has to happen before, which entity to do, how the ownership structure, we have to have a conversation with a team of a corporate attorney with the CPA, with an immigration attorney that will basically guide the company to the right decision both from a tax perspective, financial perspective, protecting the company's interest and the shareholders, and then immigration. Everything has to come and we have to work together as a team in advance and then after everything's set up, then we go in and file for the visa paperwork. Then, the visa process itself could take a few months but there are, depending on the type of visa, but there are ways to expedite. Some visas can be granted as quickly as two weeks with [inaudible 00:27:28] and all that, and some take between a month and a couple months or some can take up to six months.

John Monahon:                What's usually the process of who gets in touch with who when someone's interested in coming? Is it usually, do they have counsel over there or accountants and wherever they're coming from contact the U.S. attorneys or you? Who usually reaches out first? How do they find you?

Evelyn Ashley:                   Google? Google search?

John Monahon:                Yeah.

Karen Weinstock:            Funnily enough, we do get clients that Google search.

Evelyn Ashley:                   We don't, either.

Karen Weinstock:            The majority really comes from referrals. Sometimes we are the first point of contact of them. Sometimes it's the CPA, sometimes there's a corporate law firm. Sometimes it's a foreign entity. It just depends on the situation. Sometimes it's a person that they already know that's here that knows us and so forth. It just depends but it doesn't really matter how they reach that decision. The important thing to understand from the foreign business owner perspective is to really have the right team in place because that will take out a lot of frustration and aggravation in the process.

John Monahon:                Right, yeah. It must be sort of going in any situation where you're not sure of how everything is going to play out is a little bit scary. I think being able to trust everybody around you and knowing that they're going to steer you right and let you know of all the pitfalls is really important.

Evelyn Ashley:                   I do think though, you know it's kind of interesting because I think the world sees us in the U.S. as eternal optimists, and that optimism sometimes translates into a high confidence that we know something when we don't necessarily know. I know that we've dealt with clients that have come to the U.S. that have trusted people that have made recommendations to them that were just totally awful. Not because they intended to create harm, but they just wanted to be helpful, you know.

Karen Weinstock:            Part of the hardships of these companies that are coming from abroad is they don't really know who to trust and how to do things. They can get very much blind sighted. For example, I had a client who hired a sales person based on the sales person's resume, and not knowing that American sales people really, really inflate or overly estimate what they have done. They were so impressed by this person, whereas the Europeans try to be very modest and humble on their resumes. They thought oh, if this guy's selling $10 million a year, he's being very humble, it probably means he's selling 20.

                                       Well, the reality was that he was part of a team with 20 people put together so you know, very different misconceptions. To actually figure that out and to be able to plan for it and realize that tin advance, that's the hard part, and be successful. One of the myths that people think, oh, United States such a big market. Money must be just growing on the trees. It's so easy to do business here, where actually it's not that easy. Especially in the business to business environment, it takes longer. People can tell you they're the decision maker, and they're not. Not because of a bad intention, but it's just how the culture is.

Evelyn Ashley:                   I think it's a different communication system, cultural, perhaps that not everyone actually understands kind of at a basic level.

                                         When we come back, Yelena is going to tell us all about the considerations that a business has to go through in order to determine where to go, why to go there, and what they need to be thinking about.

Speaker 1:                           Now, back to In Process-Conversations About Business in the 21st Century with Evelyn Ashley and John Monahon. For more information, visit trusted-counsel.com.

Evelyn Ashley:                   Welcome back. When we broke, we had gone through the immigration process. We want to talk a little bit about where should a business set up when they decide to come to the U.S. It's a wide open space. Karen mentioned a little earlier, sometimes if you've got a prior customer relationship, you'll end up close to that customer if you're going to set up an operation. I know that there are also incentives that various states offer and what have you seen on this, Yelena?

Yelena Epova:                    What I'd say [inaudible 00:32:43] my clients, I tell them that don't let tax considerations lead. You have to really look from the business perspective, first. Obviously, if you need to be in California or in Washington State, you wouldn't set up necessarily in South Carolina just because of the tax incentives, right?

Evelyn Ashley:                   Mm-hmm (affirmative).

Yelena Epova:                    There are definitely some better states than others to set up in. I know there's a huge misconception with foreign companies coming here that they all have to set up in Delaware and because they will have tremendous tax savings. I always have to explain the same thing to all of them, that you can set up there and John, you can definitely expand on it more for intellectual property protection and other legal considerations, but if you don't really have business in Delaware, it's not going to save you tax.

John Monahon:                Can I tell you, that's a common misconception among U.S. citizens, too? Should I be in Delaware?

Yelena Epova:                    Yeah, well you could.

Evelyn Ashley:                   Where are you sitting now?

John Monahon:                Or you could be in Georgia.

Yelena Epova:                    Right, right. Really, you have to look and see what different states can offer you. Of course if you're just coming as a distribution company for example, states may not be as excited because you may be creating just two, three, four jobs, maybe even one job at the beginning. If you actually building a plant, if you're doing some sort of manufacturing that states are much more interested in you because you're creating jobs, right? [crosstalk 00:34:21] When you're creating jobs, states can offer first of all statutory incentives that they have to offer to everybody. They can also offer discretionary incentives, which-

Evelyn Ashley:                   Tax incentives and other-

Yelena Epova:                    Yeah, could be property tax abatements, could be different credits, could be industrial revenue bonds, and could be a lot of different things. Sometimes it's grants that don't have to be refunded, which is not a bad deal.

Evelyn Ashley:                   Very attractive.

Yelena Epova:                    What I tell my clients that haven't decided necessarily where they're going to be located, is that they have to look at several locations. Let's say it's southeast, right, a lot of them would look at South Carolina, North Carolina, Georgia, Alabama and actually let states compete for them, right, who is going to offer more. It's not necessarily always the state that offers the incentives. It could be county, it could be city, so there are different levels in different jurisdictions. Georgia is actually great for locating companies and I mean a lot of people see that we actually have a lot of large companies moving to Georgia.

Evelyn Ashley:                   Right. I think a lot of people aren't aware that Georgia actually has, it's like number three in the U.S. for the number of corporate headquarters of Fortune 500 companies.

Yelena Epova:                    There's a reason for that. There are a lot of reasons. Airport of course is one of them [crosstalk 00:35:49], but you know climate and just cost of living, a lot of different things. If you look from the tax perspective, Georgia now has what's called, "One factor apportionment law." What it means is that you can have, I don't know, a thousand employees here, 10,000 employees here, but if you only sell 10% of your products for example to Georgia customers, you only get taxed in Georgia on 10% of your income.

Evelyn Ashley:                   Oh wow.

Yelena Epova:                    If you don't sell anything to Georgia customers, you don't pay income tax in Georgia.

Evelyn Ashley:                   Wow.

Yelena Epova:                    It's kind of like a tax haven-

Evelyn Ashley:                   That's interesting-

Yelena Epova:                    From that perspective. I'm sure there are a lot of companies that are moving here because of that law, because not every state-

Evelyn Ashley:                   Would offer that.

Yelena Epova:                    Normally you would look into [inaudible 00:36:38], you would look into fixed assets, inventory, and sales. Georgia only does it based on sales.

Evelyn Ashley:                   I do think that as lawyers, we probably should mention the reason why Delaware has the name that it does with regard to setting up operations is because it does have, from an investor and minority shareholder perspective, it has probably the most developed case law in the United States on the protection of those shareholder rights. That has actually turned into people believing well that's the only state that has the most developed corporate code, and that's not true at all. We've actually all of the states other than Louisiana; have actually adopted a model corporation code that looks very, very similar. Both Corporation Act and Limited Liability Company Act. You can rely on other states to give you legal protection from liabilities within the company as shareholders.

John Monahon:                I actually think that brings up a good point about when people are selecting entities in the U.S. A lot of times, people go either towards corporations or LLCs. I mean one thing that sort of dovetails with what I guess Evelyn was just saying is corporations have been around for a very long time. There's tons of case law, there's tons of statutes built there. A lot of decisions have been handed down. The laws around it and sort of the understanding of it and the interpretation of how those statutes are going to be read are fairly known and fairly steady, which is why a lot of people tend to like corporations. The structure itself is very set. You have your board of directors and then you have your shareholders. The duties that the board of directors owe to the shareholders are known, the fiduciary duties that they owe. It's just very set. Now the limited liability companies are much more of a new entity that started probably in the early '90s to take hold. That's much more flexible. It could be either run by the members who are the owners in that situation, or the managers who can act sort of as the executives or as a board of directors. It's something that's very flexible.

Karen Weinstock:            Right.

Evelyn Ashley:                   It's extremely flexible. Actually I don't think people realize just how flexible a limited liability company is. If you actually, if you don't build process and procedure and requirements into your operating agreements for that entity, you don't actually have them. There's very little to rely on, corporately.

John Monahon:                Right, yeah, and so that makes it a little bit harder to put in sometimes. The up side on an LLC though as opposed to a corporation is the duties are far less as far as up keeping to make sure that nobody pierces the corporate veil. It's very stringent on corporations for somebody to reach the shareholders personal assets. It's much different for LLCs. Then there's also a lot of tax reasons as to why you might pick a corporation or an LLC, one over the other.

Yelena Epova:                    Right, right. Normally, you would want to ask if the owners of the foreign company actually moving here because a lot of the times they are setting up in the U.S. with the goal to move here one day. That could guide the choice of entity, for sure. Also, the structure in the foreign country and whether, for example, the other country recognizes LLC as an entity, as a [inaudible 00:40:22] entity or maybe, or maybe not. Sometimes it cannot get treated protection benefits. I wanted to add just a few things to give another plug to Georgia. Georgia actually offers a lot of tax credits to companies. This is statutory. This has to be offered so it's not discretionary incentives. You know there's a jobs credit, there's investment tax credit, and re-training credit. I wanted to mention one very unique credit, research and development tax credit, which has, it's a federal credit but different states either have it or not. Georgia has it and it's actually the only state in the U.S. that allows that credit to be applied against payroll tax. Super important because a lot of companies who are startups, they don't have income tax to pay, but they can monetize this credit almost immediately.

Evelyn Ashley:                   Wow. That's really, really a great benefit, actually. Believe it or not, we're actually out of time. We have a couple of minutes, Kurt's telling me.

Yelena Epova:                    I just started. I get excited about this.

Evelyn Ashley:                   I know, you're just getting into the whole thing. There are a lot of other things that from a legal perspective that businesses do need to consider, too. I alluded to kind of the negative elements, but I think contract law in the United States is a little bit different from most of the countries. We are a common law country the way that England is set up and the U.K. and Canada. Most other countries are civil law countries and so they are driven by statutes. We of course are completely flexible and have very little with regard to requirements that go into the way that you deal during business dealings. One of the things to consider though, is there are actually implied warranties that get put into your contracts if you don't actually disclaim them. Ladies, it's been great having you today. Thank you so much, Karen and Yelena. We really appreciate that you could join us.

Yelena Epova:                  Thank you very much.

Karen Weinstock:            Thank you for having us.

Evelyn Ashley:                   If you would like to reach Yelena at Habif Arogeti and Wynne, you can visit their website at www.hawcpa.com. If you'd like to reach Karen, please visit the Weinstock Immigration Lawyers website at www.visa-pros, with an S, dot com. We hope you enjoyed the show today and if you have questions on the topic, please reach out to us at info@trusted-counsel.com and please be sure to visit our website at www.trusted-counsel.com. Thank you for joining us.