WHEN: September 17, 2019 6:00 PM
WHERE: 230 Park Avenue, 21st Floor
NEW YORK–Dunnington Bartholow & Miller LLP, a full-service New York City-based law firm serving the international community announced today the publication of Doing Business in the United States, a guide to assist business leaders, startups and individuals in navigating the most important business law issues facing foreign investors and entrepreneurs in the coming years. The launch will be celebrated with an event for journalist members of the Foreign Press Association.
The investment and regulatory environment in the United States has changed substantially under the Trump Administration creating a need in the international community for timely and accurate guidance on how to navigate new challenges, particularly on the immigration front. At the same time, states like New York and California have acted aggressively in the fields of privacy and labor law creating new challenges and opportunities for the foreign investor. The United States, long a haven for foreign investment, has made important changes that owners of real property and corporations need to be aware of.
Doing Business in the United States covers nine areas of law:
- Agency and Distribution
- Intellectual Property
- Real Estate
- Inheritance, Wealth Protection and Taxation
- Investigations and Regulatory Compliance
- Litigation and Dispute Resolution
The Dunnington Guide to Doing Business in the United States provides guideposts to international and foreign entrepreneurs and investors conducting business and managing assets in the United States on legal issues they should expect to face in the coming year. The Dunnington Guide to Doing Business in the United States is aimed at decision makers needing a simple, practical approach to business and investment planning in the U.S.
About Dunnington Bartholow & Miller LLP
Dunnington Bartholow & Miller LLP was established in 1921 in New York City and provides a full range of legal services to individual and corporate clients across national borders. For more information, visit www.dunnington.com.
Dunnington’s core clientele consists of corporations and individuals with international interests. Dunnington’s multilingual team of attorneys collaborate to provide practical, cost-effective advice in the areas of business, real estate, immigration, wealth protection, dispute resolution, intellectual property, and art law. Dunnington has three areas of international focus serviced by its Italy, France and Latin America Desks.
About the Foreign Press Association
Founded in 1918, the Foreign Press Association is an independent not-for-profit organization that aims to further the interests of its members, to take action on behalf of the foreign correspondents in the U.S., to keep members in contact with American life and opinion and with affairs in other countries, and to contribute through the media of all countries to the work of fostering international goodwill. For more information, visit www.foreignpressassociation.org.
Jonathan King – Executive Director
Foreign Press Association
Dunnington Bartholow & Miller LLP
Susan Rothwell, Chair, Wealth Management Practice
Questions for Dunnington’s Legal Experts From The Foreign Press Association
FPA: In 2019 and beyond, what legal questions and trends in immigration law will international investors face in the United States?
Dunlap and Tegoni: The U.S. Citizenship and Immigration Services (USCIS) has promulgated a new rule, which will enter into force on November 21, 2019, amending the provisions governing the employment-related fifth preference (EB-5) immigrant investor classification. Generally, under the EB-5 program, entrepreneurs are eligible to apply for lawful permanent residence in the United States if (1) they make the necessary investment in a commercial enterprise in the United States and (2) create or preserve ten full-time jobs for qualified U.S. workers. The new rule provides priority date retention for certain EB-5 investors, increases the required minimum investment amounts (from $500,000 to $900,000), reforms the targeted employment area (TEA) designation process, and clarifies USCIS procedures for the removal of conditions on permanent residence. Specifically, the new provisions give the Department of Homeland Security responsibility for directly making TEA designations “based on revised requirements in the regulation limiting the composition of census tract-based TEAs.”
FPA: In 2019 and beyond, what legal questions and trends in trust & estate law will international investors face in the United States?
Susan Rothwell, Partner – Dunnington Bartholow & Miller LLP
Rothwell: U.S. citizens with wealth should focus on the planning opportunities afforded by the $11.4 million (for an individual) or $22.8 million (for a married couple) amount that can be excluded from federal estate tax under the TCJA. This is known as the exemption amount. This exemption amount lasts until 2026 when it falls back to $5 million ($10 million for couples) adjusted for inflation. If the next election brings a change in leadership, the window to enjoy this exemption amount may narrow further. In contrast, foreign nationals with real estate or other investments in the U.S. may end up paying more in federal estate taxes than their U.S. counterparts because they are entitled to exclude far less of their U.S. situs assets from federal estate tax. The exemption is only $60,000 (unless they reside in a country that has a special estate tax treaty with the US). Foreign individuals living outside of the U.S. will continue to need assistance in structuring their investments here to minimize or avoid U.S. estate and gift tax consequences.
FPA: In 2019 and beyond, what legal questions and trends in trademark law will international investors face in the United States?
Olivera Medenica, Partner – Dunnington Bartholow & Miller LLP
Medenica: The United States Patent and Trademark Office (USPTO) has recently introduced the requirement for foreign based applicants to retain a U.S. licensed attorney in order to prosecute a trademark filing. We anticipate that brands and foreign counsel will increasingly reach out to U.S. counsel, not just for the filing process but for trademark counsel as well. Having the ability to have skilled local counsel on board will ultimately result in savings for the client in the long run. Trademark law has seen some significant changes in the past few years, especially with respect to the kinds of material that can benefit from trademark protection. We have seen trademark law expand to include marks that were previously unable to benefit from registration, such as offensive or disparaging words, or marks that refer to cannabis related products and so forth. These are evolving topics that require a current and well-rounded understanding of how the USPTO works, and what is or is not protectable. By having local counsel on board, foreign business can anticipate greater efficiency and stability in protecting their brands.
FPA: In 2019 and beyond, what legal questions and trends in copyright law will international investors face in the United States?
Raymond J. Dowd, Partner – Dunnington Bartholow & Miller LLP, author Copyright Litigation Handbook (Thomson Reuters/West 2018-2019)
Dowd: In recent years, copyright has emerged as a major item on the U.S. international trade agenda. With current trade frictions, 2019 and beyond will be a hand-to-hand combat. The Netflix experience illustrates what we should see in the coming years: as U.S. content distributors increasingly seek foreign markets, foreign content producers will push back and demand not only local content production, but also push back for better content distribution to U.S. markets. That means more international and foreign content owners seeking to protect copyrights, trademarks, software, music, photography and texts, literary and otherwise, in the United States. To effectively exploit, monetize and protect content in the United States, registration with the U.S. Copyright Office will increasingly be at the forefront of investor, licensor and distributor concerns. We should expect to see M&A and finance counsels spending more time on due diligence with Copyright Office records to ensure that their investments are properly registered and their security liens are properly secured by recordation with the Copyright Office. On the litigation front, 2019 has seen courts push back on “copyright trolls” holding companies hostage. Litigation over software and new technology continues unabated, our Dunnington antipiracy team deeply involved in taking down unauthorized television video-streaming services. We can expect to see those trends continue. Even better news: the U.S. Copyright Office is implementing a modernization plan and has reduced its backlog. Foreign rights holders can expect to see improved efficiencies.
FPA: In 2019 and beyond, what legal questions and trends in the restaurant/bar sector of the hospitality industry will foreign owners and investors face in the United States?
Robert Swetnick, Partner – Dunnington Bartholow & Miller LLP
Swetnick: The future should be bright for those now entering the restaurant/bar sector of the hospitality industry. The cost for rent is declining due to the growing amount of available of retail space caused by e-commerce. Established restaurants are having difficulty adjusting to the changes in the law (higher minimum wages) and the heightened enforcement of existing laws (minimum wage, overtime, ADA). As a consequence, many are closing. In addition, the increased use of web-based delivery services has reduced the amount of space and staff necessary to operate a successful restaurant. Someone entering the market at this time is better equipped to adapt to this new reality.
FPA: In 2019 and beyond, what legal questions and trends in employment litigation will foreign employers face in the United States?
William Dahill, Partner – Dunnington Bartholow & Miller LLP
Dahill: Over the past few years, there has been a sharp increase in the number of complaints and claims filed by both men and women for sexual harassment. While the validity of these claims vary, it has become even more crucial for employers in the U.S. to have clear guidelines and procedures for handling complaints by employees. The initial response to such claims is critical to avoid unnecessary litigation. Moreover, it is essential for supervisors to intervene and appropriately address situations that appear to be harassment. Employers should be aware that courts have become increasingly more likely to analyze cases, at least at the outset, in a manner favorable to the employees making harassment claims. At the same time, laws are also transforming to make such claims easier to pursue by imposing new requirements on employers. For example, New York City’s Human Rights law (New York City Administrative Code § 8-101) has been amended to make it easier for claims to proceed beyond previous procedural hurdles. Starting this year, both New York State (New York Labor Law § 201-g) and New York City (Stop Sexual Harassment in NYC Act, Local Law 96 of 2018) mandate yearly sexual harassment training for all employees. New York State has also passed laws intending to eliminate private arbitration of sexual harassment and discrimination claims (N.Y. C.P.L.R. § 7515). It is important for employers to examine their arbitration policies in light of new laws in New York and other states. Given that these laws are also subject to preemption by federal law, it is now more important than ever for employers to have local counsel experienced in employment matters available to assist them with managing the various guidelines and procedures in this rapidly changing area of law.
FPA: In 2019 and beyond, what legal questions and trends in complex civil and criminal litigation will international businesses and entrepreneurs face in the United States?
Luke McGrath, Partner – Dunnington Bartholow & Miller LLP
McGrath: In 2019-2020, we will again experience economic downturn – resulting in an uptick in bankruptcy filings and litigation. In July 2019, there has been a 3% increase in bankruptcy filings across the United States – from 62,241 for July 2018, to 64,283 filings in July 2019. In addition to bankruptcy filings, times of economic uncertainty create increased litigation in which businesses and entrepreneurs fight for their slice of a shrinking economic pie. During these times, clients look to Luke and Dunnington to swiftly resolve crisis so they can focus on running their business and weather the storm.
FPA: Looking forward to 2020 and beyond, what trends do you see for legal issues impacting international brand development and maintenance?
Donna Frosco, Partner – Dunnington Bartholow & Miller LLP
Frosco: In a global economy, SMEs and start-ups should plan for success from the outset. Expansion and scaling up in our Internet societies can occur quickly. I recommend clients create and implement intellectual property protection strategies early. These include licensing plans, evaluation of intellectual property and proprietary rights terms of corporate agreements, including employment agreements and M&A transactions, and e-business policies that impact marketing, web presence and mobile commerce. Effective licensing can protect quality and good will while increasing market share. E-business now extends beyond web pages and e-portals to social media, native advertising and influencers. Each aspect has its own legal challenges. C-suite members and marketing heads must work with legal counsel to develop strategies that balance creativity and protection. Planning and implementation at early stages also makes bottom line sense as dealing with disputes or violations later often is more costly and time consuming and can tarnish brand reputation.
FPA: In 2019 and beyond, what legal questions and trends in foreign investment in commercial real estate will foreign entities face in the U.S.?
Louis Teitel, Partner – Dunnington Bartholow & Miller LLP
Teitel: There are many nuances to foreign investment and leasing in U.S. commercial real estate, specifically, in retail and office leasing, with guaranties often required by U.S. landlords from the foreign entity. New York commercial leases are lengthy and complex documents, often drafted in terms highly favorable to landlords. Commercial office leases in New York City generally run forty or more pages (in single-space, 10-point font) and contain fifty to sixty separate article headings and section sub-heading and sub-sub headings, and sub-paragraphs and sub-sub paragraphs – invariably addressing, in each instance, the responsibility and accountability of the tenant to the landlord for almost every conceivable eventuality. These ‘standard’ lease clauses have one goal—to capture as much revenue and recover as many expenses as the landlord can from tenants occupying office space. Focus on the fine print is crucial. Landlords are used to negotiating lease points, but they will not voluntarily relinquish rights or revenue streams unless the tenant or the tenant’s representative negotiates for them. The tenant must navigate the fine print to know what and where particular liabilities and revenue streams are incorporated. Defaulting on any of the obligations under the lease can be very expensive. Having sophisticated knowledge of alternative choices can avoid substantial liability.
FPA: In 2019 and beyond, what legal questions and trends in corporate law will international businesses, investors and entrepreneurs face in the United States?
Jonathan Frank, Partner – Dunnington Bartholow & Miller LLP
Frank: Companies and individuals domiciled outside of the United States often desire to access capital in the US, particularly in the last few years given the large volume of money available for investment in the US market. Dunnington Bartholow & Miller LLP can assist with navigating the legal obstacles and decisions that accompany raising capital in the US. Recent changes to the US tax code and the Securities and Exchange Commission Regulations are tricky, but also provide opportunity for non-US based companies and individuals to access cash in the US market. The Dunnington firm can additionally assist with introductions to investment banks and private funds with which the firm’s Mergers & Acquisitions group has established relationships.
FPA: In 2019 and beyond, what legal questions and trends in data privacy will foreign entities face in the United States?
Samuel Blaustein, Partner – Dunnington Bartholow & Miller LLP
Blaustein: Data privacy is emerging as major legal issue for businesses operating in the United States and especially for businesses operating in multiple countries. The acquisition, storage and dissemination of medical and other personal identifying information of employees, clients and others is likely to be the subject of extensive rulemaking and litigation over the next several years. Similarly, intellectual property and other rights are harder to protect in the digital age. There are multiple sources of law that vary by jurisdiction making it imperative that businesses act prudently to safeguard relevant data and be prepared to litigate effectively, if necessary.
FPA: In 2019 and beyond, what legal questions and trends in M&A law will international investors face in the United States?
Alan D’Ambrosio, Partner – Dunnington Bartholow & Miller LLP
D’Ambrosio: In light of (I) the Chinese corporate divestiture of a number of acquisitions made in recent years, coupled with the significant reduction projected for near-term Chinese acquisitions, and (2) the economic slowdown in Europe, the Mergers and Acquisitions market should provide significant opportunities with fewer bidders.
FPA: In 2019 and beyond, what legal questions and trends in trusts and estates will international investors face in the United States?
Albert Lingelbach, Partner – Dunnington Bartholow & Miller LLP
Lingelbach: With interest rates declining, and the potential for increased gift and estate taxes over the next years, it might be fundamental to reconsider Grantor Retained Annuity Trusts, Intra-Family loans, and “Defective” Grantor Trusts. The latter is a useful estate-planning tool used to freeze certain assets of an individual for estate-tax purposes, but not for income-tax purposes. It is effectively a grantor trust with a purposeful flaw that ensures the individual continues to pay income taxes. It will be interesting to see whether the protection provided by Irrevocable Insurance Trusts will regain significance?
Steven Lewis, Partner – Dunnington Bartholow & Miller LLP
Lewis: Steven E. Lewis has over 40 years of experience at Dunnington Bartholow & Miller, including advising business and individual clients about matters in the U.S. and abroad. Steve is a lawyer’s lawyer and has acted as outside general counsel for an international advertising firm with well-known clients on a wide variety of matters, including executive employment matters, commercial disputes, IP matters, and litigation matters in New York, California, Illinois and Latin America. Steve has also acted as outside general counsel for a variety of European groups including those in the glass processing business and linear motion industries. He has extensive experience in connection with M&A matters and other corporate acquisitions and also had advised regarding U.S. trade regulation and antitrust laws. Steve also has extensive experience in legal aspects of the precious metals industries, secured transactions and real estate and commercial leasing matters, including some of the largest transactions in New York City. Steve has also advised clients regarding bankruptcy matters and U.S. export controls