Miller quoted in HBJ’s article “Foreign energy horde invades Houston “
By: Jordan Blum, Houston Business JournalJune 13, 2014
Gary Miller was quoted in this article by Jordan Blum, discussing the wave of foreign energy companies setting up shop in Houston — and why some are making their moves quieter than others.
Here is one segment from the article – Read the full article on the HBJ website (subscriber content).
Moving an international company to Houston is easier said than done
The horde of foreign energy companies moving to Houston is continuing to grow, but making the transition to the United States is easier said than done.
There is bevy of bureaucracy to overcome and tax decisions to make for any company moving to the U.S., said Gary Miller, a founding shareholder with Houston-based BoyarMiller law firm, which helps international companies make the transition.
And the red tape is just the beginning.
“The biggest issue for them is finding the right people and finding the right place to call home,” Miller said. “And it’s getting harder to find a new location. So people are moving farther out and, not just to the Energy Corridor — farther west than that.”
But step one is choosing what entity to take to Houston, Miller said, which involves simply qualifying the foreign company in Texas or forming a new U.S. subsidiary that often has “America” or “U.S.” in the formal company name.
Miller said he encourages companies to form local subsidiaries — “a regular, old C-corp,” not a partnership company — for tax and revenue reasons and not for branding purposes.
“The key is to be taxed like a corporation and not taxing the individual shareholders,” Miller said. “It’s different advice for companies coming in from overseas than the small, startup companies in Texas.”
Then the companies have to choose their state of domicile, such as picking between Delaware or Texas. Usually it is easier to just go with Texas, Miller said.
“They (international company leaders) don’t realize until we tell them that every state, including Washington (D.C.), has their own entity,” Miller said.
Companies also must deal with little things like acquiring tax identification numbers to open local bank accounts because they do not have Social Security numbers, he said.
These issues also involve deciding whether to hire a local person to lead the subsidiary or bringing their own people from overseas. Often, it is best to bring a foreign leader who is already “indoctrinated” with the company, Miller said. That entails dealing with immigration and visa issues. There are also language barriers for many companies, too.
Law firms will then help connect international companies with third-party businesses to help them take care of employee health and benefits packages and other “mundane things.”
Other factors include determining how aggressively a company plans to move into the U.S.
“Some want to come over in a big way,” Miller said, with mergers and acquisitions and rapid hiring sprees. “Others are just looking to get their feet wet.”
Miller said a lot more companies are making their way to Houston than in the past.
“Houston is the oil capital of the world,” Miller said. “This is where they want to be.”
And it is more than just the shale boom drawing energy companies to Houston. There is a resurgence in the Gulf of Mexico now that we are four years removed from the Deepwater Horizon disaster.
“Now that we’ve recovered from the tragedy in the Gulf, there’s a lot more going on,” Miller said.
Read the full article on the HBJ website (subscriber content).