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How to setup a foreign branch office in California?
Anonymous1 views3 answers
A Hong-Kong compnay like to setup a branch office in CA/USA.
Employee (Sales staff from Hong-kong) will use the CA office as a working place when he/she visit USA from time to time. Payroll is in HK, contract will be signed by HK, invoice will be issued by HK, & Revenue collected by HK company.
Question:
Should the HK-company (1) register in CA as a foregin corporation, (or domestic corp.) (2) register in the city & get business license (3) register CA re-sale ID, (4) get Federal ID,
Or, should the HK-company just rent a space for their occassional usage without register any of above.
Thanks,
Dana Howard Shultz
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on Sep 13, 2010
I have helped more than 20 overseas companies in situations similar to what you have described. In my experience, they almost always form a corporation here for the following reasons:
1. Many customers here prefer to do business with a U.S., rather than overseas, entity. The U.S. entity provides a level of comfort, and shows a level of commitment, that is not present with the overseas entity.
2. The U.S. legal system is well-known for a high incidence of litigation. Foreign companies like to have a legal firewall between their U.S. operations and the foreign parent company.
3. The cost to form and maintain a corporation here is quite low, especially in comparison to the formation costs and minimum-capital requirements in many other countries.
Once the corporation is formed, the other requirements mentioned in your question fall into place.
I have included below links to several blog posts that you might find helpful.
Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.
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Amy Lynn Bingham
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on Sep 13, 2010
Your company should definitely register in California; both to protect your company should you need access to the courts and to comply with local laws. Whether you choose to be a domestic company or a foreign company authorized to do business in California depends on additional factors. You will need to have a city business license if you plan on doing any business in California cities. Contact any business attorney in California for a consultation and they can explain your options. Our office does free consultations, both in person and via phone. Contact us at 866-707-1777 or 801-627-1736 for more information.
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Pamela Koslyn
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on Sep 13, 2010
You should see a CA business lawyer to discuss who this CA business will function. Assuming the company plans to have U.S. clients, will these U.S. clients have to send their payments to HK? Does the company plan to use CA courts and CA law, if necssary, to enforce its contracts, and if CA law applies, to defend itself in CA courts? If so, it won't be able to do that unless it registers with the CA Secretary of State, as either a foreign corporation qualfiied to do business in CA, or as a CA domestic corporation.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
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