This article first appeared on the EACCNY website. It is part of a series of articles written by Marc S. Friedman, Director of Professional Relations at Global Commerce Education, Inc. as a collaboration with the European American Chamber of Commerce in New York.
In the most recent article in this series, I explained how many non-US companies refrain from doing business in the US because of Myth #8 – The possibility of many employee lawsuits scares us. I explained that through a use of techniques including documentation and training the risk of employee litigation against a company can be substantially reduced. In this installment, I will address Myth #9 – There are no effective ways to control the risks to our business if we come to the US. This Myth, too, is easily debunked.
Not too long ago the publication Financial Management identified the 10 greatest business risks ranked by board members and senior executives*. They are:
Rapid speed of disruptive innovation.
Resistance to change.
Managing cyber threats.
Regulatory change and heightened regulatory scrutiny.
Corporate culture may not encourage timely escalation of risk issues.
Succession challenges and talent retention.
Privacy management and data security.
Adverse economic conditions in markets in which the company does business.
Productivity and efficiency increases with the help of big data.
Digital, low-cost competition.
The Enterprise Council on Small Businesses identified the top three worries of businesses in the US – poor sales, uncertainty of government regulations, and labor concerns.
Forbes concluded the three biggest concerns of US companies were hiring, healthcare costs and government regulations.
While all US ( and, indeed, non-US) companies have all or most of the above risks and concerns, what is most significant to this series of articles is that in all three studies, and others as well, regulatory compliance is one of the top concerns of companies in the US. But as I explained in an earlier article, the Trump Administration has worked hard to revamp the US regulatory scheme to make it easier for US (and foreign companies with US operations) to do business here, thereby substantially reducing the regulatory risks. Thus, no European company should be discouraged from entering the US by regulatory risks which can be controlled, if not eliminated, by a careful analysis prior to entry of the regulations, including Federal and State regulations that may affect your company’s products and services. Knowing about these regulations in advance, significantly decreases the possibility that your company with be violating them. This analysis can be done by a lawyer familiar with US regulations or, at times, by a regulatory consultant.
The same can be said for privacy and data security regulations, although generally speaking the US requirements are not as rigorous as the European requirements. Consulting with the right professional as your company is contemplating entry to the US will help to make your path easier.
As you can see, there are other business risks identified in the above surveys but no doubt most of those concerns would be true in a non-US company’s home country or other non-US countries where you now are conducting business or may do so in the future.
It is clear that as the preceding articles in this series demonstrate, all the legal risks that may affect a European country seeking to enter the US can be controlled and, indeed, in many cases eliminated by careful pre-entry planning and seeking the advice of qualified professionals. As for the non-legal ordinary business risks, your company undoubtedly has those same risks wherever it is doing business and there is nothing peculiar to the US that would increase or add to those non-legal business risks.
In the next installment of this series I will address the last legal myth: Myth#10 – It is almost impossible to locate trusted advisers including reliable and cost-effective lawyers and accountants. Stay tuned.
* "What worries boards and management most in 2018" December 2017 Financial Management
Compliments of Global Commerce Education, a member of the EACCNY