International Expansion Frankfurt Companies
Frankfurt (Germany) businesses are looking for new ways to access new markets for their products and services. While opportunities typically present themselves in the domestic marketplace, there will come a time when foreign markets (such as the U.S.) represent an opportunity that must be explored. Expanding into the U.S. offers a significant opportunity due to high consumer demand for services and well educated and diverse workforce, but it also comes with a variety of challenges and risks. Where should foreign operations be located? What type of facility is needed? What important business relationships should be developed? The list can seem endless. For this reason, it’s imperative to partner with an experienced advisor that can help guide you through each step of the process.
German Company Experience
Clayton & McKervey has experience guiding Frankfurt and other German companies through the expansion process. Our team of experienced professionals, combined with business partners, provides the needed experience and practical knowledge to make the expansion process as seamless as possible. From establishing banking relationships, setting up accounting systems, tax structuring, site selection, and supply chain issues, we have the experience to set your efforts on the right path.
Why Invest in the U.S.?
While each Frankfurt company has its own reasons for expansion, it’s clear from this German American Business Outlook Survey that both consumer demand for services and proximity to customer base are major reasons for why companies expand.
Source: German American Business Outlook 2019
Frankfurt Subsidiary Expansion
Clayton & McKervey offers the following services to German companies considering expansion to the U.S., based on current efforts, including:
- Planning Stage – The services offered during this stage are designed to help Frankfurt companies start their U.S. business. Assistance with entity structuring, banking, payroll, employee benefits and required insurance is provided. There is also discussion with selecting a location and important workforce issues that many need to be considered. Our team will also assist with accounting system set up, cash management policies, reporting options and employee matters. Finally, we work with management to assist with tax structuring, payroll, and other tax concerns.
- Start-Up Stage – The top goal is getting the U.S. company established and ready to do business as quickly as possible. Our team works with you to set up a day-to-day operations process for financial reporting and auditing. We can assist with automating transactional activities, monthly closing and reporting services, and assistance with U.S. tax reporting needs (including federal, state and transfer pricing concerns).
- Growth Stage – As the business grows the needs of the organization change. Our team can work with you to assist with implementing ERP/MRP software, meeting new reporting requirements, assist with transitioning accounting responsibilities in-house and facilitate tax planning strategies to reduce income tax liabilities.
Why Frankfurt Companies Choose Michigan?
There are many locations to select from when determining the ideal location for your company’s U.S. subsidiary. However, manufacturing, system integrators and others choose Michigan because of the various advantages offered by our location and access to services, including:
- Competitive Tax Rate – There is a flat state corporate tax rate is 6%, the personal income tax rate is 4.25% and a sales tax of 6%. There are also several state programs designed to fuel growth through tax and other incentive programs.
- Transportation – Michigan features a robust transportation system for the movements of goods to east coast U.S. and Canadian markets. For instance, there are 18 commercial airports within the state including Detroit, which is one of the largest domestic airports in the country.
- Qualified Workforce – Our workforce is quite specialized with the highest concentration of engineers in the country with 130,000 statewide. In addition, Michigan also ranks within the top 10 states with skilled trade workers boasting over 250,000 across the state. In fact, German companies already employ over 38,000 Michigan workers demonstrating the value of the local workforce.
- Cost of Living – As is the case in most parts of the world, the cost of living impacts where people choose to live. Michigan’s cost of living is 10% below the national average and currently ranks as the fourth most affordable state in the country
Source: U.S. Department of Commerce
Contact Our International Consulting Team
Clayton & McKervey works with companies in Frankfurt and across Germany to prepare, plan and establish a Michigan based U.S. subsidiary. If you are interested in learning how we can assist, complete the form below and a member of our team will follow up with you promptly.