Unlocking Business Opportunities in the U.S.

The U.S. legal landscape can be seem impossible to navigate for foreign business leaders looking to expand their operations into its complex market.   

Rooted in historical ties, cultural affinity, and linguistic connections, Spain remains among Miami’s top foreign investors – just look at the City of Coral Gables. These deep relationships forge a reliable foundation for successful business collaboration.  

The International Section of the Florida Bar and the Madrid Bar Association recently co-presented “Invirtiendo en EE.UU.: Aspectos Legales” (Investing in the U.S.: Legal Aspects.) Alcides I. Avila, a 43-year legal veteran who works closely with Spanish-owned businesses in the U.S., spoke in detail about the legal requirements and nuanced processes to establish a business in the U.S.  

Choosing the right business structure  

One of the first critical steps an investor must take when entering the U.S. market is to decide which business structure best suits their company. Foreign businesses may operate through a branch or a subsidiary, which can be organized as a corporation or a limited liability company (LLC). Corporations and LLCs are similar to the Spanish “sociedades anónimas” and “sociedades limitadas,” respectively. The choice is typically tax driven.  

In a branch structure, a foreign company establishes their presence without creating a separate legal entity. The most significant challenge of a branch structure is that it directly exposes the parent company to potential civil liability in the U.S., making it the least desirable for most foreign entities.  

A subsidiary can take the form of a corporation or an LLC, offer more favorable tax treatment, and protect the parent company from civil liability.   

Corporations are separate legal entities, subject to corporate income tax. Generally, foreign shareholders (including the parent company) will not be required to file U.S. income tax returns. Most foreign entities who establish a subsidiary in the U.S. choose the corporation structure.  

A limited liability company (LLC) is also a separate legal entity and offers similar protection from exposure to civil liability. An LLC is a disregarded entity for tax purposes – meaning it is not subject to federal income tax. Instead, the profits and losses “pass through” to the members or owners, who are required to file the tax return.  

The LLC may elect to be treated as a corporation to avoid having the parent company file taxes in the U.S.    

The most critical and significant difference between the different business structures is the level of protection they offer from civil liability.   

Foreign entrepreneurs and entities entering the U.S. market must also consider liability insurance, trademark registration, compliance with a host of applicable state and federal laws, and other crucial factors. They should begin by gathering experts who understand their business goals, culture, and unique needs. Seasoned attorneys, accountants, financial advisors, and real estate brokers, among other professionals, can offer specialized advice and assist in determining the best course of action.   

Why Miami  

Many entrepreneurs and investors see Florida as a strategic gateway to the U.S. and Latin American markets. Historically, Spain has made significant investments in the banking, finance, construction, and food and beverage sectors in Florida.   

Florida’s strong GDP growth, its status as a trade and logistics hub, its pro-business environment, booming real estate and construction markets, and its high quality of life, all contribute to drive foreign investment.   

About Alcides I. Avila  

Mr. Avila is one of AVILA’s founding partners, and co-leads the firm’s Corporate Law and Financial Services practices. For over 40 years, he has represented domestic and foreign clients in all aspects of international business transactions. He has helped countless foreign banks, entities, investors, and entrepreneurs to establish successful business operations in the U.S. He regularly represents clients before the Federal Reserve, the FDIC, the OCC, the Florida Office of Financial Regulation, and other regulatory agencies. 


Original article published in Global Miami Magazine