Establishing a U.S. Subsidiary
Carlton Hoyt
If you are reading this post you are probably deserving of some congratulations. Your life science tools company has grown sufficiently to consider starting a subsidiary in the world’s largest market – the United States. Before doing so, however, there are many issues that you need to consider to make sure it’s the right move for your company. In the right situation there can be many benefits, but it can also be a waste of time and money if the need does not exist or planning is poor.
Before I get into the topic, I’d like to offer a disclaimer. BioBM Consulting consists of professional life science businessmen, marketers, and web experts. We are not lawyers or accountants. We strongly recommend that you seek the advice of a lawyer and / or financial expert to ensure that you fully understand the legal and financial considerations of establishing a subsidiary.
That being said…
In order to make sure that your subsidiary will deliver the value your company hopes to realize from it, carefully consider the desired benefits and create a plan to help ensure that value is actually delivered. In other words: why do you want to open a U.S. subsidiary? Is a subsidiary the correct solution to realize the desired benefits? If so, how? What will your company and its subsidiary need to do in order to deliver those benefits? Develop a plan that takes into account your company’s needs, the desired time frame, and the things that need to be done to meet your goals. Make sure that your goals and plan is realistic and that execution is feasible for your company.
That being said, there are many potential benefits that may be realized from establishing a U.S. subsidiary. For example:
- North American consumers may be more trusting of your company if it has operations in the United States.
- You will have easier access to the U.S. life science marketplace.
- Improved logistics. Your products will be more readily available to North American consumers and delivery times can be greatly improved
- Your subsidiary will be able to do business with customers across the Americas during normal business hours.
- Your company will have much greater control over U.S. sales and operations than it would if it simply sold through U.S. distributors.
- There may be a tax advantage over simply having a U.S. branch of your current company.
- Your company may be protected from the much of liability of your U.S. operations.
- Etc…
A U.S. subsidiary can be a great way to improve your company’s access and market penetration in the world’s largest life science market. Knowing what your goals are and establishing a plan to realize the intended value can help you get the most out of a U.S. subsidiary.
