business focus
An insight into RSM’s international start-up services
Matt Wright visited RSM’s Reading offices to chat with Mike Sables about all things red, white, and blue
Mike Sables is the outsourcing partner at RSM with responsibility for the US, although as he is keen to point out, it is not simply about selling outsourcing to US clients but rather offering international start-up services. Put simply, Sables helps US clients to set up businesses in the UK.
To the uninitiated, this may seem rather self- evident – after all, how hard can it be to set up a business in a capitalist country which shares the same language?
Using the example of a small technology company from San Francisco, Sables takes me through some of the ‘10 considerations for setting up in UK’ which RSM uses when first addressing potential US clients:
• What are the commercial drivers? Why does the company need to set up in the UK, who will it be selling to, what is its business plan?
• What help and support will the company require? What is the correct entity to register, how will the company recognise accounting revenues?
• How will staff be employed in the UK? Does the company know about UK employment contracts, maternity, sick, and holiday pay?
• What benefits will be offered to employees? For example, there are differing tax treatments on stock options in the UK versus the US.
• How will VAT be managed? US companies are familiar with local sales taxes but not with national taxes such as VAT. RSM offers a fully-serviced back office to manage all returns and make payments such as VAT and payroll taxes.
• What HR support will be available? Whether it be dealing with immigration process for ex-pats or laying off underperforming salespeople, UK-based HR support is essential.
It soon becomes apparent that there are far more issues here than meet the eye, and that Sables is required to have a vast amount of knowledge to address them all.
Luckily, he is not alone. In RSM, Sables has the backing of the seventh largest UK accountancy firm (fifth largest in the US), and a dedicated office of over 100 people
based in Reading. Together they have the requisite expertise to advise on the vast array of services demanded by international companies.
Common mistakes
So, with all this knowledge on offer, what are the most common mistakes according to Sables when setting up offices in the UK?
• Take advice first – it is frightening how many businesses do blunder into opening up an overseas office.
• Go with demonstrable experience – a firm which can call upon experts in both countries will already be aware of the obvious, and less obvious mistakes.
• Do not assume that the cultures in the UK and Europe are the same as the US – there are very different cultures at play; for example, US businesses expect decisions, once made, to be implemented immediately, and work at a very fast pace thereafter.
• Owner-managed businesses are very different to venture capital-backed businesses.
To help address these issues, RSM recently ran a breakfast seminar at Reading’s Madjeski Stadium, ‘Doing business with the USA’ attended by over 70 companies. This focused on both inbound and outbound companies; ie US companies setting up in the Thames Valley, and Thames Valley companies seeking to do business in the US.
A panel of experts discussed taxation, business immigration, and international business relation issues, and there was a case study presentation by a local Reading company, FISCAL Technologies, to illustrate the common pitfalls.
Past and future trends
Having recently returned from a 10-day trip to the West Coast of the US, and meeting with over 30 companies, Sables was struck by the increasingly cautious attitude to technology valuations being adopted by venture capitalists, and the increased focus on managing cash to slow the burn rate.
In the UK, job mobility is starting to become more prevalent. This has always been a
THE BUSINESS MAGAZINE – THAMES VALLEY – SEPTEMBER 2016
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feature of the US market, where no stigma is attached to changing jobs frequently – in fact, those who do not move around are often looked upon negatively by US employers.
In the US, there is also a trend for urbanisation, as young professionals are beginning to prefer to work in the cities (such as San Francisco) rather than move or commute out to the Valley up to two hours’ drive away. This is a feature which could benefit Reading in the future post-Crossrail, as start-ups will be able to locate close to where their founders or main customers (such as Microsoft, Oracle, or Vodafone) are based, while retaining a close link with creative talent in London.
In conclusion, there is huge potential for both inbound and outbound companies in the Thames Valley, and the one-stop shop and years of experience offered by RSM will help to smooth the way for any companies looking to take this significant step.
Mike Sables 0118 9530350
mike.sables@
rsmuk.com rsmuk.com
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