Entering the U.S. market or taking your U.S. business abroad adds a whole new set of complex laws, operating regulations and country-specific policies to the challenges of running a business. At Houston CPA and advisory firm Doeren Mayhew's 2014 client conference, international tax and advisory leaders Carrie Koshkin and Jennifer Mailhes shared best practices and real client experiences for steering clear of risks, managing tax implications and improving intra-company operations.

1. Navigating Unknown
Territory: Top 10
Considerations
Carrie Koshkin, JD
Jennifer Mailhes, CPA
Shareholders at Doeren Mayhew
Copyright © 2014. All Rights Reserved.

2. Tax Considerations
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Export Incentives: IC‐DISC
Taxable Presence
Entity Classification Considerations
Foreign Tax Credits
U.S. Reporting Requirements
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3. Consideration 1: Export Incentives
• IC‐DISC: Export incentive
– IC‐DISC is paid a commission by the related party
– The related party receives a deduction for this
commission payment
– IC‐DISC is not taxed on the commission income
– The IC‐DISC is deemed to make dividend
distributions to its shareholders, which are taxed
at the dividend rate
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4. Consideration 2: Taxable Presence
• Statutory: U.S. trade or business
• Income tax treaties: Permanent establishment
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5. Consideration 3: Business Form
• Entity classification election
• Deferral v. flow‐through structures
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6. Consideration 4: Foreign Tax Credits
• U.S. provides a credit for foreign taxes
– Limited to U.S. tax on foreign sourced income
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7. Consideration 5: U.S. Tax Filings
• U.S. companies must file U.S. informational
returns for the foreign entities they control
• Foreign‐owned U.S. companies must file U.S.
tax returns and informational returns
– Foreign business with U.S. trade or business must
also file
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8. Consideration 6: Leveraging Skill Sets
General Manager Skill Set
• All the skills of a CEO and more
• Typically a GM is hired to grow U.S. or foreign sales, but
they must have hand in all three areas of the business:
CEO/GM
Sales &
Marketing
Operations
Administration
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9. Consideration 6: Leveraging Skill Sets
Entrepreneurial
• Decisions on allocation of resources ‐ money, people, effort
• Communicating vision
• Motivating team
• Understanding all areas of the business
Corporate
• Understanding of culture and differences in practices
• Knowing overall vision
• Influencing direction so it can be embraced by the local
team
• Optimizing leverage between locations
• Appropriateness of controls
• Not full autonomy of business owner
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10. Consideration #7: Executing the Strategy
Carrying Out the Vision
• Understand why the parent company came to the
United States or the other way around and
articulate that to your team on the ground here
• Make sure the local vision is compelling to attract,
retain, motivate in that culture
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11. Consideration 8: Reporting
Understanding What to Report Back
• Key communications tool
• Use to build successes and explain challenges
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12. Consideration 9: Rethinking What Works
Understanding That Practices That Worked in
Parent Country May Not Work Here
• Competitive compensation
• Appropriate benefits
• Structure of local office to service clients
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13. Consideration 10: Communicating
Maintaining Appropriate Dialogue Back & Forth
• Understand company cultures in both offices
• Use foreign resources where appropriate
• Make sure you have appropriate authority in the local
office to be successful and flexible
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