In the last ten years, the number of US companies started by foreign-born entrepreneurs has skyrocketed. From Google, Facebook, LinkedIn, Zip Car and Tesla, foreign-born founders created some of the most successful US companies. Indeed, whereas before 2006 approximately 20% of venture-backed public companies were founded by immigrants, from 2006 to 2012, this percentage grew to 33%.
At the same time, the number of foreign technology and life science companies that established highly successful US operations also exploded. Coming from all parts of the world, including China, India and Central Europe, these companies have established a powerful American presence and have advanced their business by leveraging their domestic technology and experience with US management expertise.
Both foreign entrepreneurs and foreign companies recognize the enormous value of establishing a US business and proving their mettle in the US market. They believe, quite correctly, that a company which thrives in the US gains invaluable credibility and experience to succeed in the rest of the world.
However, foreign companies coming to the US face many challenges, both cultural and legal. Many foreign entrepreneurs do not appreciate the diversity and sheer size of the US economy. Subtle cultural differences often create barriers that are difficult to overcome, whether in hiring and retaining US personnel or entering US markets. Legal conventions, from corporate governance to equity compensation, often seem alien to foreign businesses. Simple logistical issues, such as opening a bank account or establishing proper tax and wage reporting mechanics, become a major stumbling block. Corporate structures defining the relationship of the US entity and the foreign company raise complex tax and control issues which impose significant concerns for potential US partners and venture investors, among others. Lawyers who can navigate the treacherous shoals of these differences are few and far between. To be most effective, they must straddle both cultures, so that they can understand US requirements and explain those requirements to their foreign clients in a credible and understandable manner.