You began your startup outside of the United States, and now you would like to relocate it to Silicon Valley. Every year many startups make the move without working through the complex legal issues. Failing to address those issues can kill your startup. San Francisco-based startup and venture capital attorney Jason Putnam Gordon of Polsinelli LLP will provide a high-level overview of the common US legal issues surrounding the move. This program will provide information on the following key issues: · Corporate structure · Tax consequences · Intercompany agreements · Immigration · Intellectual property issues · US employment laws · The Committee on Foreign Investment in the United States, also known as CFIUS · Export-control Issues · Common pitfalls and mistakes · And much, much more.

1. How to Relocate an International Startup to
Silicon Valley
Presented on October 12, 2021 by Jason Putnam Gordon
Email: jgordon@polsinelli.com

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• Today’s Discussion is General Information – Not Legal Advice
• We will be discussing rules and exceptions thereto. Those rules,
exceptions, and exceptions to the exceptions may not be applicable to your
situation.
• You need to retain competent legal counsel to review all facts and
circumstances before weighing in with advice.
• Off-the-cuff answers to your questions are not, and should not be taken as,
legal advice.
Important Caveats

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• My Background
• Big Picture
• Corporate Structure
• Tax Issues
• Intellectual Property
• Intercompany Agreements
• Immigration
• Employment Laws
• Common pitfalls and traps for the unwary
Overview

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• Venture Capital and Emerging Growth Company attorney—practicing law
since 2005.
• Polsinelli is an Am Law 100 firm with approximately 900 attorneys in over
twenty offices throughout the US.
• My office is in San Francisco, but I work with companies throughout the
US and the world.
• I love working with entrepreneurs on financings and as outside general
counsel.
My Background

5. 5
Big Picture
Create Increasing Value
Idea(s)
(Intangible Assets)
Technicians who have
skills like: sales,
marketing, business
acumen
(Services)
Investors
(Capital)

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Big Picture
Create Increasing Value
Idea(s)
(Intangible Assets)
Technicians who have
skills like: sales,
marketing, business
acumen
(Services)
Investors
(Capital)
Company Increases in Value

7. Corporate Structure
▪ Balance of several factors including
▪ Business reasons
▪ Tax issues
▪ Fundraising concerns
▪ Intellectual property concerns
▪ Goods and/or services to be provided between the companies
▪ Common options
▪ Having a US corporation is not necessary, but typically advisable
▪ Typically have a US corporation as the parent company or subsidiary
▪ Typically a DE C-corp
▪ Usually do not want having common shareholders of affiliate entities

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▪ Include the following
▪ Structuring the US corporation so that it is not a taxable event
▪ Putting in place a structure so that foreign corporation is not subject to US tax
▪ Tax implications for service providers
▪ US employees
▪ Probably includes officers
▪ May include directors
▪ Transfer Pricing
▪ Concept is to ensure that corporate entities are not being used to fraudulently avoid taxes
via goods provided and services not being rendered a FMV.
▪ Special filing issues
Tax Issues

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▪ Types of IP in the US
▪ Patents
▪ Trademarks
▪ Copyrights
▪ Trade Secrets
▪ Generally want all IP flowing up and into the parent with appropriate licenses
back down to subs and affiliates.
▪ Generally want branding to be the same or similar between jurisdictions
Intellectual Property

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▪ Intercompany agreements are the means by which the answers to the
foregoing issues are documented.
▪ Goods and services to be provided
▪ IP assignments and licenses
▪ Treatment of derivative work
▪ Compensation for the above
Intercompany Agreements

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▪ Important to consider a number of factors including
▪ Length of time in US
▪ Time you have before you need the visa
▪ Whether it will result in permanent immigration
▪ Whether spouse will have a right to work.
▪ Alphabet soup of options, which include:
▪ B-1
▪ O-1A
▪ H-1B
▪ L-1A
▪ E-2
▪ EB-1A
Immigration Issues

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▪ Federal and state laws
▪ Wage and hour issues
▪ Contractor classifications
▪ Unemployment insurance
▪ Disability
▪ Parental leave
▪ IP assignment agreements and confidentiality agreements
▪ Equity awards
Employment Issues

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▪ Export Control Laws
▪ Committee on Foreign Investment in the United States, also known as
CFIUS
▪ Non-standard terms and/or documentation for VC-backed companies
▪ Thinking the laws of the US and its states are the same the country of
origin
▪ Tax and accounting issues
▪ The wrong advisers
Pitfalls and Traps for the Unwary

14. Polsinelli PC provides this material for informational purposes only. The material provided herein is general and is not intended to
be legal advice. Nothing herein should be relied upon or used without consulting a lawyer to consider your specific circumstances,
possible changes to applicable laws, rules and regulations and other legal issues. Receipt of this material does not establish an
attorney-client relationship.
Polsinelli is very proud of the results we obtain for our clients, but you should know that past results do not guarantee future results;
that every case is different and must be judged on its own merits; and that the choice of a lawyer is an important decision and
should not be based solely upon advertisements.
© 2020 Polsinelli® is a registered trademark of Polsinelli PC. Polsinelli LLP in California. Polsinelli PC (Inc.) in Florida.
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