TIBA Investment Guide 2014 English-Web

www.texastrade.org/tiba

GUIDE TO ESTABLISHING A BUSINESS IN TEXAS

TEXAS INTERNATIONALBUSINESS ACCELERATOR

WHY INVEST IN TEXAS?Texas, is the second largest state in the United States. It has a bullish economy, an outstanding infrastructure and established facilities to conduct international business. The state has a population of over 25 million people most of whom live in major metro areas of more than one million inhabitants, such as Houston, San Antonio, and Dallas. Other important cities include Austin and Fort Worth which are important economic centers for the State.If Texas were to be a sovereign country, it would have the 14th largest economy in the world by gross domestic product (GDP). As of June 2014, the Texas unemployment rate remained at 5.1%, which is below the national rate of 6.2%. Additionally, Texas has a gross state product of $1.332 trillion, the second highest in the US.

The Office of the Governor of Texas has identified six key industries to concentrate economic support in an effort to create new jobs. These industries are: 1) advanced technology and manufacturing, 2) aerospace, aviation and defense, 3) biotechnology and life sciences 4) information and computer technology 5) petroleum refining and chemical products 6) energy.

Chief Executive Magazine has named Texas as the “Best State for Business” for nine consecutive years. The state is recognized for its business-friendly tax, regulatory environment, well-prepared workforce, low costs and well-established business environment. Despite the economic downturn in recent years, Texas continues to lead the country in economic recovery.

TEXAS METROPOLITAN AREAS AT A GLANCE

SAN ANTONIO:• San Antonio’s main economic drivers are oil and gas, financial services, healthcare, tourism and

government defense. The city is home to noted national landmarks and celebrated public spaces like the Riverwalk and the Alamo, the city welcomes more than 20 million visitors per year;

• The city is home to the headquarters of several Fortune 500 companies, such as Valero, USAA, Clear Channel Communications, CPS Energy, H-E-B, Frost Bank, Tesoro and SWBC;

• In 2011 San Antonio was ranked the #1 nation’s best performing city as well as the #1 best city for Job Outlook.

2 TEXAS INTERNATIONAL BUSINESS ACCELERATORThe most valuable tool to invest in the United States

HOUSTON:• The economy of Houston is primarily based on the energy industry (particularly oil),

however, biomedical research and aerospace also constitute large sectors of the city’s economy;

• As of 2011, 23 companies of the Fortune 500 list have their headquarters in Houston or the surrounding metropolitan region;

• In 2013 Houston was named the top city for global trade. As well as being named #1 of the most competitive metros of America in 2014.

AUSTIN: • Austin is the only city in the nation with double-digit percentage (11%) job growth in

a five year period from October 2008 to October 2013 (no other city has seen a five-year job growth over 8% in the same period);

• Unemployment rate in Austin is 5.2%, which is below the national average. It is a growing hub for pharmaceutical and biotechnology companies;

• Austin is also the anchor city for the Austin-Round Rock-San Marcos Metropolitan area with a GDP of $86 billion in 2010.

DALLAS/FORT WORTH/ARLINGTON:• Dallas/Fort Worth/Arlington is one of the fastest growing metros in the US, with an

economy ranking 6th in the nation at $440.1 billion. As a sovereign state, Dallas would rank 17 of the 196 countries by national economy;

• Major industries include defense, financial services, information technology and data, life sciences, semiconductors, telecommunications, transportation, and processing;

• Further, 13 privately-held companies with at least $1 billion in annual revenues, and 19 Fortune 500 companies headquartered in the area.

San Antonio is home to the headquarters of several Fortune 500 companies, such as Valero, USAA, Clear Channel Communications, CPS Energy, H-E-B, Frost Bank, Tesoro and SWBC. The city hosts other companies such as Boeing, JP Morgan Chase Bank and Allstate. These companies choose San Antonio as its regional headquarters because of its geographic location and market growth potential.

GUIDE TO ESTABLISHING A BUSINESS IN TEXAS 3

4 5TEXAS INTERNATIONAL BUSINESS ACCELERATORThe most valuable tool to invest in the United States

WHO WE AREThe Texas International Business Accelerator (TIBA) was created in 2011 as an initiative of the International Trade Center. The objective of this program is to promote growth and economic development in Texas by assisting foreign small and medium-sized companies who are looking to establish a company in Texas.TIBA provides advising assistance as well as research services, market analysis and business development, which are tailored to the particular needs of the client and are kept confidential. The program has a team of highly trained Business and Foreign Investment Specialists in the area of market research and business plan development, who are always dedicated to work with the client to achieve a more productive investment. Furthermore, TIBA assists in creating business plans that can be presented to the immigration office for investor visa processing.

These services are an effective tool for companies and foreign investors seeking to invest or establish a company in Texas. The main goal is to provide the best advising services by experts that will help create a successful investment project. Since the beginning of the program TIBA has helped establish businesses that have created more than 1,800 jobs in the region.

For more information visit: www.texastrade.org/tiba.

TEXAS INTERNATIONAL BUSINESS ACCELERATOR

Since TIBA’s inception in fiscal year 2011 it has been responsible for over 1,800 new direct jobs created and over $136 million in foreign investment to Texas. This economic impact included many small to medium-sized businesses started by foreign investors under $500k.

GUIDE TO ESTABLISHING A BUSINESS IN TEXAS4 5

OUR SERVICESTIBA offers companies customized advising services that provide the best information available for a given target market. The TIBA team has access to industry-leading databases that contain up-to-date information about a wide variety of industries.

INVESTMENT BUSINESS PLAN:Business Overview/Executive Summary, Operations Plan, Market Analysis, Sales Strategy, Management Profile and Financial Projections for 5 years.

This is one of the most important documents to present to potential investors and immigration officials. It depicts the operational plan that drives the creation of the company.

BUSINESS PLAN FOR EB-5 VISA APPLICANTS:The EB-5 Visa program allows foreign citizens to obtain green card status in the US though large-scale direct investment projects. The investment requirement starts at $1,000,000 or $500,000 in a Targeted Employment Area — a geographic area with an unemployment rate of 150% of the national average.

ECONOMIC IMPACT STUDY:The purpose of this study is to measure the economic impact of a project, in terms of job creation, productivity, and profitability. These studies, in partnership with economists at the Center for Community Business Research, use established best-practice economic models to obtain the most effective results.


EB-5 PROGRAMThrough this program, TIBA asssists foreign investors through the complex process of obtaining a permanent residence, return of investment, and US citizenship through the Employee Based 5th program (EB-5). The program requires the entrepreneur to make capital investment of either $500,000 or $1,000,000 in a new commercial enterprise in the US.

Our program offers business plans for EB-5 investment projects, which include feasibility studies, market research, 5-year financial projects, Economic Impact study, and Target Employment Area study for individual investors or regional centers.

It’s worth mentioning that all of our services are in compliance with the United States Citizenship and Immigration Services (USCIS).

EB-5 TEAMJaime A. Martinez Senior Project Manager Texas International Business Accelerator – San Antonio [email protected] 210.954.3938

Thomas Tunstall, Ph.D. Director of Research Center for Community and Business Research [email protected] 210.458.2472

Javier Oyakawa Senior Business and Economic Research Center for Community and Business Research [email protected] 210.458.2036

SERVICES

EB-5 BUSINESS PLANS

•REGIONAL CENTER BUSINESS PLAN

•EB-5 PROJECT BUSINESS PLAN


TIBA TEAMTIBA Program CoordinatorJaime A. Martinez – Senior Project Manager

In 2011, Jaime A. Martinez as a Senior Project Manager founded TIBA, which is the University of Texas at San Antonio (UTSA’s) only foreign direct investment program.

Jaime’s role as a Senior Senior Project Manager is to provide specialized business advice to foreign investors to Texas in the areas of business plans, financial projections and EB-5 projects.

In 1999 he began his professional career with Frost National Bank working in the Customer Service, Telephone Banking, and International Private Banking departments. Jaime continued his banking career in 2006 with Wachovia Bank as a Financial Specialist. In his eight years in banking he assisted his clientele with consumer / business lending, financial advice, and money management. In addition, Jaime assisted many Mexican National business owners with establishing their businesses in San Antonio. From 2007-2010 he was a small-business advisor for the Small Business Development Center of San Antonio where he generated great economic impact for the institution, country, and state.

Jaime holds a BBA in International Business from UTSA and a MBA in Management from Our Lady of The Lake University.

Foreign Investment SpecialistsThe TIBA Foreign Investment Specialist Team is made up of college seniors and/or recent graduates in the area of international business. Each member has experience and background working in market research, financial analysis, accounting, business management, marketing, and other specialty areas. All are bilingual in Spanish and English.

To contact an advisor, please send an email to [email protected].


TIBA EVENTS AND CLIENT SNAPSHOT

INVEST IN TEXAS/INVIRTIENDO EN TEXASThis is a conference designed for business owners or entrepreneurs interested in making an investment in the State of Texas. The conference discusses the following:

• How to start a business in the United States;

• How to obtain visas for foreign investors and professionals;

• Business legal structures in the United States;

• Corporate taxes.

For further information about our Invest in Texas conference, please contact [email protected].

Texas es la puerta de entrada al mercado de los Estados Unidos al ofrecer amplias oportunidades de inversión. Texas cuenta con una economía de gran potencial al estar clasificada como la doceava a nivel mundial en términos de su PIB. De igual manera, cuenta con una ubicación céntrica, y un espíritu emprendedor que lo convierte en un estado competitivo que promueve el crecimiento económico.

La conferencia está dirigida a empresarios extranjeros que quieren expandir, invertir o crear un negocio en Texas.

Temas incluídos:•Cómo iniciar un negocio en los Estados Unidos;•Cómo obtener visas para inversionistas y profesionales

extranjeros en Estados Unidos;•Estructuras Legales en los Estados Unidos;• Impuestos.

UTSA Downtown Campus

Fecha: 14 de Noviembre del 2014 8:30 am – 3:00 pm CST

Ubicación: UTSA Downtown Campus Durango Building Southwest Room (Rm 1.116) 501 W. Cesar E. Chavez Blvd. San Antonio, TX 78207

Costo de recuperación: $35.00 (Incluye desayuno y almuerzo)

Reservaciones y mayor información: [email protected] Teléfono: 210-458-2470 (Estados Unidos) Twitter: @TIBAProgram #InvirtiendoTexas Facebook.com/texastrade

InvIrtIendo en TexasCONFERENCIA DISEÑADA PARA EMPRESARIOS INTERESADOS EN HACER UNA INVERSION EN TEXAS

CLIENT SNAPSHOTCompany: Wings Army Restaurant Foreign-direct-investment restaurant startup. http://wingsarmytx.com/

Advisor: Jaime Martinez

Assistance Provided: Foriegn-direct-investment start-up assistance; market research; business plan.

Results of Our Assistance: Opened 3 new restaurants; 30+ jobs created; $500k owner investment.


INSTITUTE FOR ECONOMIC DEVELOPMENT TIBA is part of the UTSA Institute for Economic Development, which since 1979 has been helping the economy one business at a time. It is composed of 11 centers and programs which excel in advising, training, and research for entrepreneurs, experienced business owners and communities seeking strategic economic planning. These programs serve local, regional, national and international initiatives. For more information visit: www.iedtexas.org.

Key Institute for Economic Development centers for foreign business include:

• International Trade Center The SBDC International Trade Center is one of the largest and most successful trade assistance organizations in Texas. Its staff provides technical trade advising, customized market research and innovative training programs for companies seeking to access global markets. The Center is home to the Texas International Business Accelerator, and SBDCGlobal. For more information visit: www.texastrade.org.

• Center for Community and Business Research The Center for Community and Business Research (CCBR) offers applied economic and business research to serve the needs of economic development agencies, workforce development boards, businesses, associations, city, state and federal governments and other community stakeholders in search of information to make business and policy decisions. For more information visit: www.ccbr.iedtexas.org.

• Rural Business Program The Rural Business Program supports economic, business and community development in rural communities in the South-West Texas Border SBDC Network territory that includes major Texas-Mexico border communities. The program provides applied economic research, community and business strategy, resource development and plan implantation. Rural business advisors train business, communities, local governments and agencies engaged in economic or community development activities. For more information visit: www.rbp.txsbdc.org

• San Antonio Small Business Development Center The San Antonio Small Business Development Center (SBDC) offers services that meet the needs of experienced small business owners as well as entrepreneurs just starting a business. The SBDC provides confidential, one-on-one business advising free of charge in the 10 counties surrounding Bexar County. Low-cost training workshops covering a wide array of topics are offered to help small businesses succeed. For more information visit: www.sasbdc.org.


STEPS TO START A BUSINESS IN TEXASContact a TIBA Business Advisor1. The advisors will provide individual guidance throughout the development of the project business plan. All services are confidential. Call 210-458-2470 or e-mail [email protected] to schedule an appointment.

Legal Aspects — Contact A Corporate and/or Immigration Attorney 2. Get a Federal Tax Identification Number or Federal Employer Identification Number.

Fiscal Obligations — Contact an Accountant3. Obtain information about the type of taxes and fiscal obligations.

4. Get official permits and licenses in accordance with your type of business. http://www.sanantonio.gov/dsd/permits_license.asp

Immigration Requirements (if Applicable) — Contact an Immigration Attorney5. Process work visa (see Comparison of Visas).

Banking Issues — Select a Bank6. Contact the bank of your choice.

7. Open a business bank account.

Get Informed About Tax Incentives and State and City Resources8. Office of the Governor’s Texas Economic Development Division: www.texaswideopenforbusiness.com.

9. City of San Antonio’s Economic Development Department: www.sanantonio.gov/edd/.

10. Bexar County Economic Development: www.bexar.org/ed/incentives.

Other Considerations11. Get the appropriate insurance for your business.

12. Obtain services according to the business needs (office, warehouse, real estate agent, logistics, etc.).

13. Develop promotional and marketing materials for your company.



COMPARISON OF VISAS

VISAS B-1 L-1 E-2 TN H-1B

Classification Business Visits Executives, managers, and professionals

Foreign investors NAFTA professionals Professionals

Characteristics of Visa Allows visits to the US to attend meetings, conduct negotiations, sign contracts, establish a corporation, and buy a house or other assets.

Transfer of executives, managers and skilled workers from the same company for the purpose of establishing an office in the US

Investment through money or assets in an established business or a startup. This category also includes essential employees.

Specific list of suitable careers, for example, accountants, engineers, lawyers, pharmacists, scientists, and teachers. Only for Canadian or Mexican Citizens.

Specialized professionals or career that can be recognized in an occupation that normally requires a bachelor’s degree or higher education in a field related to the position.

Permit to collect wages in the US

No Yes Yes Yes Yes

Work Permit No (Yes, for domestic workers)

Yes Yes Yes Yes

Intention to return to their country of origin

Yes Yes Yes Yes Yes

Period Up to 3 years. Extensions are possible

7 years (max.) for executives and managers;

5 years (max.) for specialized workers;

Up to 2 years. May extend or renew the period of stay in 2 year increments.

Up to 2 years. May extend or renew the period of stay in 2 year increments.

Maximum period of stay generally 6 years

Permanent Residence No The law allows residency paperwork to begin without risking temporary status.

You can solicit an application for residency through an immigration attorney

You can solicit an application for residency through an immigration attorney.

The law allows residency paperwork to begin without risking temporary status.


COMPARISON OF BUSINESS LEGAL STRUCTURES

CHARACTERISTICS SOLE PROPRIETORSHIP PARTNERSHIP LIMITED LIABILITY CO. CORPORATION

Formation Automatically from your business activities

Partnership agreement Articles of Organization Articles of Incorporation; Bylaws

Duration Dissolved by the owner Dissolved per Partnership agreement

Limited to a fixed time (typically)

Perpetual

Liability Can be hold personally liable for the debts and obligations of the business

Unlimited liability Members typically not liable for debt of LLC

Shareholders typically not personally liable for corporation

Simplicity of Operation Easy and inexpensive to form, complete control, and easy tax preparation

Relatively few legal requirements

Some formality (less than corporations)

Board of Directors; officers; annual meetings; reporting

Management You have complete control Partnership agreement Operating agreements that outline management

Elected Board of Directors

Taxation Your business is not axed separately- the sole proprietorship income is your income

Partners pay tax on their share of income; can deduct losses against other income

Correctly structured, no tax at entity level; income/loss passed to members

Taxable entity

Double Taxation No No No Yes

Raising Capital Can’t sell stocks, hard to get investors, and banks are hesitant to lend money.

Partner contributions; recruit more partners

Can sell interests; agreement limits

Sell stock shares for capital

Registration County Courthouse County Courthouse Secretary of State Secretary of State



ADDITIONAL BUSINESS SUPPORT ORGANIZATIONS The following organizations offer support to entrepreneurs in the US. They provide resources and tools to help improve the competitiveness of companies and the professional development of executives.

SELECT USAFederal level institution with the purpose of showcasing the US as the world’s premier business location and to provide easy access to federal-level programs and services related to business investment. Select USA offers on their website a searchable guide of federal programs and services available to businesses, industry snapshots, and more.

For more information visit: www.SelectUSA.Commerce.gov

US EXPORT ASSISTANCE CENTER - SAN ANTONIO:Provides information to companies interested in participating in international trade. Offers assistance to exporting companies and legal information to importer companies.

For more information visit: www.trade.gov/cs/

THE US CHAMBER OF COMMERCEBusiness organization representing the interest of more than 3 million businesses of all sizes, sectors and regions. The US Chamber of Commerce advocates for pro-business policies that create jobs and grow economy. Members have access to the latest tools, information, and best practices in advocacy and communications.

For more information visit: www.uschamber.com

NAFTA STATE OF TEXAS OFFICE - MEXICO:The Office of the State of Texas in Mexico supports investors who are looking to expand their operations, providing customized advising to establish your company or make an investment in the State of Texas.

For more information visit: http://governor.state.tx.us/ecodev/business_resources/international_business_and_recruitment

TEXAS ECONOMIC DEVELOPMENT AND TOURISM DIVISION (EDT)The EDT works to create jobs and export opportunities for Texas by pursuing business expansion and relocation prospects. They work in partnership with local convention and visitors bureaus, chambers of commerce, and private travel-related organizations to promote economic opportunity and prosperity for Texas through both domestic and international tourism.

For more information visit: www.texaswideopenforbusiness.com


SAN ANTONIO HISPANIC CHAMBER OF COMMERCE:This chamber provides services for entrepreneurs, businesses and large corporations in San Antonio. The network of this organization has over 1,000 members.

For more information visit: www.sahcc.org

CITY OF SAN ANTONIO DEPARTMENT OF ECONOMIC DEVELOPMENT:Provides information for businesses intending to settle in San Antonio.

For more information visit: www.sanantonio.gov/edd

SAN ANTONIO INTERNATIONAL RELATIONS OFFICE:Office of International Relations - Dedicated to the economic development in South Texas. Offers assistance in international issues for companies in Mexico interested in trade between the region, South Texas, and the world. They provide a direct connection between Mexico and the city of San Antonio.

For more information visit: www.sainternationalrelations.org

ASSOCIATION TO INVEST IN USA (IIUSA)Industry trade association for the EB-5 Regional Center Program. Their primary mission is permanent authorization of the EB-5 Regional Center Program. From FY 2005-2013 the Program has accounted for over $6.5 billion in capital investment that supported over 131,000 US jobs.

For more information visit: www.iiusa.org

MEXICAN ASSOCIATION OF SMALL BUSINESS DEVELOPMENT CENTERS (SBDCS):It certifies, trains, and advises small businesses in Mexico that want to globalize their products and services through technological platforms.

For more information visit: www.amcdpe.org

ASSOCIATION OF MEXICAN ENTREPRENEURS (ASOCIACIÓN DE EMPRESARIOS MEXICANOS AEM):The Association provides professional and intellectual development of members through social, cultural, and educational events. It is composed of professionals, entrepreneurs and friends.

For more information visit: www.aem-usa.org



THIS GUIDE WAS BROUGHT TO YOU BY THE GENEROUS CONTRIBUTIONS OF OUR SPONSOR:

A SPECIAL THANK YOU TO OUR PARENT ORGANIZATIONS:

UTSA Institute for Economic Development www.iedtexas.org

South-West Texas Border SBDC Network www.txsbdc.org

International Trade Center www.texastrade.org

San Antonio Hispanic Chamber of Commerce www.sahcc.org

Foster Global www.fosterglobal.com

Vantage Bank Texas www.vantagebank.com

Cacheaux, Cavazos & Newton www.ccn-law.com

Reata Real Estate Services, LP www.reatarealestate.com

Web: www.texastrade.org/tiba E-mail: [email protected] Street: 501 W. César E. Chávez Blvd. San Antonio, TX 78207Phone: 210.458.2470Fax: 210.458.2491 Twitter: @tibaprogram @programatibaFacebook.com/texastrade

The Texas International Business Accelerator is a program of the SBDC International Trade Center. The Center was founded in 1992 and is funded by the US Small Business Administration, the State of Texas and is part of the Institute for Economic Development at the University of Texas at San Antonio. It serves the South-West Texas Border Small Business Development Center (SBDC) Network and is an accredited part of the 1,100 center national SBDC Network.

TIBA Investment Guide 2014 English-Web

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