Part I. Planning Topics 1
1. Planning the Establishment of a U.S. Operation 3
Establishing Your Strategy for Investing in the United States 5
Conducting a Feasibility Investigation 6
A Feasibility Study 9
Summary 21
2. Identifying and Evaluating Acquisition Candidates 23
Acquisitions Are Strategic Decisions 24
History of Acquisitions in the United States 25
Acquisition 27
Development of Acquisition Objectives by the Non-U.S. Firm 28
Target Industry Analysis 30
Characteristics of an Attractive Candidate 31
Implementation: Evaluation-Pricing-Financing 33
Why Some Mergers Fail to Fulfill Expectations 35
Supplement: Sample Guideline for an Acquisition 36
3. Active Investment Opportunities 39
Introduction 40
Oil and Gas Investment 41
Types of Oil and Gas Interests 42
The Investment Medium 43
Types of Oil and Gas Programs 44
Tax Consequences 47
Intangible Drilling Costs and Other Tax Benefits 48
Alternative Minimum Tax 50
Real Estate Investment 50
Types of Real Estate Investment 51
Debt-Side Investment 52
Combined Position Investment 54
Conclusion 55
Part II. Banking and Financing Topics 57
4. Banking in the United States 59
Foreign Investment in the United States 60
Banking Industry 61
Regulatory Environment 62
Bank's Lending Function 63
Borrower's Creditworthiness 64
Pricing Loan 67
Bank's Source of Funds 68
Federal Reserve Impact on Bank Credit 69
Bank Services 70
Foreign Exchange 72
Other Banking Services 72
Alternative to Banks 73
5. Government as a Financing Partner 75
General Observations 76
Overview 77
Federal Financing Programs 81
State and Local Government Sources 85
Qualifying Criteria for Financial Aid 85
New Programs 86
Conclusion 87
Part III. Legal Topics 89
6. U.S. Treaty Agreements Affecting Foreign Investors 91
U.S. Treaties and Statutory Law: A Subtle Relationship 93
Treaties and the States-The Importance of U.S. Federalism 96
The U.S. Approach to Interpreting Treaties 98
The Possibility of "Borrowing" a U.S. Treaty 98
Substantive Coverage: U.S. Income Tax Treaties as a Case in Point 99
Conclusion 105
7. Federal Laws and Regulations Restricting Foreign Investment 106
Introduction 108
Maritime Activities 109
Energy and Natural Resources 112
Environmental Restrictions 115
Communications 116
Air Transportation 117
Banking 118
Foreign Agents Registration Act 122
Political Contribution 123
Government Procurement and Benefits 124
Trading with the Enemy Act 125
Federal Securities Laws 127
International Investment Survey Act of 1976 129
Conclusion 130
Notes 131
8. U.S. Export Control 139
History of Export Control 140
The EAA 142
Other Export Controls 148
Conclusions 148
Notes 149
9. Export Financing 155
Trading Financing through Commercial Banks 156
Government Financing 160
10. The U.S. Antitrust Laws 167
The Basic Antitrust Legislation 169
Antitrust Enforcement 170
Foreign Commerce and Extraterritoriality 172
Agreements in Restraint of Trade 174
Monopoly 179
Mergers and Acquisitions 181
Patents 190
Conclusion 192
Notes 192
11. Credit-An Essential Element of American Business 195
Creditworthiness 197
Categories of Credit 199
Terms 201
Business Forms 203
Credit Analysis 204
Conclusion 207
Part IV. Tax and Accounting Topics 209
12. U.S. Tax Aspects of Starting a Business in the United States 211
Introduction 212
Determining the Organizational Structure-Branch versus Subsidiary 213
Licensing Technology 224
Use of Partnership 224
Use of Holding Companies 226
Financing the U.S. Operations 227
Start-Up Losses 229
13. Tax Aspects of Acquiring a Business 231
Introduction 232
Stock Purchase versus Asset Purchase 232
Tax-Free versus Taxable Acquisitions 234
Special Election to Increase Basis 237
Gains on Sales of Real Property Holding Companies 238
Obtaining Deductions for Acquisition Indebtedness 239
Attribute Carryovers 245
Consolidated Tax Returns 249
Foreign Subsidiaries and DISCs of U.S. Target 250
Partnerships 251
14. Taxation in the United States 255
Introduction 256
General Scheme of Federal Income Taxation 257
Taxation of Domestic Corporations 258
U.S. Income Taxation of U.S. Citizens and Resident Aliens 277
U.S. Income Taxation of Nonresident Aliens 283
Foreign Investment in U.S. Real Estate 285
Gift and Estate Taxes 286
State and Local Taxes 291
15. U.S. Accounting and Reporting Requirements 305
Background 306
The Accounting Profession 307
The Auditing Function 308
Basic Financial Statements 310
Basic Accounting Conventions 315
Discussion of Selected Accounting Principles 316
Statements of International Accounting Standards 318
Acquisition of a Private Company 319
Registration with the SEC 319
Acquisition of a Publicly Held Company 321
Stock Exchange Listing 322
Part V. Labor Topics 325
16. An Introduction to the Employment Laws of the United States for the Foreign Investor 327
Introduction 328
Collective Labor Relations: An Introduction to the Legal Process of Collective Bargaining 329
The Individual Employment Contract and Social Legislation 339
Equal Opportunity in Employment: The Discrimination Laws and the Impact of Civil Rights Legislation 346
Importing Managerial, Executive, and Technical Personnel: Visa and Immigration Problems 353
Conclusion 355
Notes 356
17. Compensation Practice in the United States 359
Basic Compensation for Work Performed 362
Employee Benefit Plan 366
Bonus and Incentive Awards 378
Stock Options and Long-Term Incentives 383
Special Executive Benefits and Perquisites 387
Conclusion 388
18. Pension Planning in the United States 391
The Role of Private Pensions in the United States 392
The Tax Qualified Plan Concept 394
Types of Qualified Retirement Plans 396
ERISA-Employee Retirement Income Security Act 402
Fiduciary Duties 405
Investing Plan Assets 409
Notes 413
19. Nineteen Executive Recruitment in the United States 415
Introduction 416
Sources of Executive Candidates 417
The Executive Search Consulting Profession 420
Choosing the Executive Search Consultant 423
The Executive Search Consulting Process 424
Notes 439
Part VI. Real Estate and Construction Topics 441
20. Foreign Investment in Real Estate 443
Reasons for Investing in Real Estate in the U.S.A. 444
How Does the Foreign Investor Differ from His U.S. Counterpart? 448
Residency and Using Real Estate Investment to Obtain Entry and Immigration to the United States 451
Limitations on Foreign Investment in Real Estate 453
Foreign Investment in Real Property Tax Act and Disclosure 454
Joint Ventures and Partnerships with U.S. Developments and Syndicators 457
Personal Liability 458
Duties and Obligations of U.S. Advisors to the Foreign Investor 463
Future Trends in U.S. Real Estate 464
21. Locating a Site 469
Preface 470
Introduction 471
The Planning Process 471
The Site-Selection Process 473
Acquisition of the Site 478
Alternatives to Site Acquisition 480
Suggested Additional Reading Material 481
22. Managing Property in the United States 483
Introduction 484
Factors to Consider before Purchasing Property in America 485
Portfolio Manager's Role 487
Management Issues after Property Is Purchased 489
Performance Analysis 495
Summary 496
23. Development and Construction in the United States 499
The Real Estate Development Environment in the United States 500
Justifying the Project from a Marketing Viewpoint 505
Financing the Project 509
Selecting the Architect and the Contractor 513
The Construction Environment in the United States 518
Justifying the Project from the Financial Viewpoint 527
Methods of Evaluation 527
Tax Considerations for Contractors in the United States 533
Controlling Costs during Construction 536
Management of Real Estate 541
Notes 544
Part VII. Mass Communications 545
24. Mass Communications in America 547
The U.S. Communications Environment 549
The Nation's Media 550
Dealing with the Media 551
Communicating with Shareholders 553
The Financial Press 554
Communicating with Security Analysts 556
Communicating with Individual Investors 558
The Role of Financial Advertising 558
Communicating with Employees 559
Communicating with Special Interest Groups 560
Communicating with Dealers and Distributors 561
Communicating with Suppliers 561
Communicating with Regulatory and Legislative Bodies 561
Handling Communicating in Crisis 562
Selecting Communications Counsel 563
Part VIII. Insurance 565
25. The Revolution in the U.S. Insurance Industry 567
Analyzing the Forces of Change 571
What Should the Insurance Business Be? 573
The Road Back...The Road Ahead 575
World Insurance Markets: A Healthy Outlook 578
If We Can Do It There, Why Not Here? 580
The Future: Fewer Companies...but (Hopefully) Better 583
Index 587