Blog: Doing business in the US – tips for Scottish businesses

Robert C Dewar
Robert C Dewar

Leading US Attorney Robert Dewar recently spoke at an event at Scottish accountancy firm French Duncan on ‘Doing Business in the US’. Here, the Scot who completed his law studies at Edinburgh University and is now an Attorney with American law firm, Williams Mullen in Richmond, Virginia, offers his latest Letter from America on how Scottish businesses should operate across the pond.

 

One of the talents that Scots have long demonstrated when moving abroad is an ability to blend in and get along with everyone. That was part of the thinking behind the GlobalScot organization – to identify Scots who have successfully assimilated into new foreign environments and understand how they could be of assistance to Scottish businesses looking to do business in those places.

In the US at present, there is an increase in nationalistic sentiment, propelled by Mr. Trump’s America First rhetoric. As a result, it is becoming increasingly valuable to foreign businesses to appear domestic for customers and trading partners and Scottish businesses can achieve that in a number of ways.

First, foreign businesses can enhance their domestic appearance by incorporating a US subsidiary. That provides a legal name for the business (e.g. Inc. or LLC) and titles for the officers (such as President and Vice President) that are familiar to US citizens. Those customers and trading partners will assume that they are trading with a local business and it avoids having counter parties asking about how the unfamiliar court system of Scotland works, or how they might enforce remedies if the goods or services they are buying don’t work out. It also eliminates the ability of purchasers to discriminate against Scottish businesses on the basis of nationality. In competitive tender situations, in particular, this may prove decisive.

Scottish businesses may also make themselves appear more domestic by taking advantage of virtual office opportunities offered by many city or county economic development agencies. Those agencies are tasked with attracting foreign and other investment to their locale and can offer domestic phone numbers that connect directly back to Scotland, or business addresses where a foreign business can rely upon a receptionist to answer calls and relay messages to Scotland. In many cases, there is no obligation to enter into a lease of substantial space to secure those services, and they can be secured for a modest fee. Having local contact details creates the perception that the business has resources in the US and can respond to issues in real time for its US customers. Many Scottish businesses have operated under that perception for years, when the truth is that almost all of their resources are located in Scotland. Provided that the customer is being looked after, there is generally no problem with such a set up.

Perhaps most appealing to Scottish businessmen is the fact that all of the above can be achieved quickly and without great expense. Under most states’ laws, the directors and officers of a company do not need to be located in the state where the company is formed and can conduct all necessary meetings from abroad. There are generally few requirements to maintain places of business in a particular state or have employees present. In today’s US, where it is difficult to discern whether a potential business contact may be a Trump supporter and an advocate of the America First ideal, being able to assimilate into the business community is of increasing value.

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