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US Market

Doing Business in the USA

BUSINESS ENVIRONMENT

Business Habits
Americans are informal. The use of given names ("first names") is common, even between subordinates and managers. Titles, except for medical doctors, are not used. Business is often conducted over breakfast, lunch, or dinner. Business entertainment may be conducted at relaxed events such as the opera, sports events, or even in personal residences. Business hours are usually from 8 a.m. or 9 a.m. to 5 p.m. (17:00) or 6 p.m. (18:00). Businesses do not close during the lunch hour period, which ranges from about 11:30 to 1:30 p.m. (13:30). Most Americans eat dinner at approximately 7 p.m. (19:00).

LEGAL ENVIRONMENT
The use of litigation in the United States to solve business and other disputes is well known. However, the risk and expense of litigation are not an impediment to conducting business in the United States. Alternative dispute resolution methods such as arbitration and mediation are gaining popularity. And, while litigation in the U.S. has increased, most businesses successfully operate for many years absent litigation of any kind.

IMPORTS AND EXPORTS
The U.S. is a member of the General Agreement on Tariffs and Trade (GATT) and several other international economic associations. The United States is an active export and import country. Its 1996 exports of goods and services totalled $625 billion; its imports totalled $818 billion. Its 1996 major export trading partners, in approximate order of volume, were: Canada, Japan, Mexico, United Kingdom, South Korea, Germany, Taiwan, Netherlands, Singapore, France, Hong Kong, Brazil, Belgium/Luxembourg, China, Australia, and Italy. Its 1996 major import trading partners, in approximate order of volume, were: Canada, Japan, Mexico, China, Germany, Taiwan, United Kingdom, South Korea, Singapore, France, Italy, Venezuela, Hong Kong, and Belgium/Luxembourg.

NORTH AMERICAN FREE TRADE AGREEMENT
In 1992, Canada, Mexico, and the United States entered in the North American Free Trade Agreement ("NAFTA"). The agreement will reduce or eliminate tariffs, export taxes, duty waivers, customs fees, and other trade barriers between the countries so that when the agreement is fully effective, businesses in the two countries will be able to ship goods either way across the three borders free of tariffs. Implementation of NAFTA began on January 1, 1994.

INVESTMENT FACTORS
GOVERNMENTAL POLICY AND INCENTIVES
The federal government allows investment in the U.S. consistent with the needs of the country. This attitude basically treats foreign capital on the same basis as U.S. capital. Any investment in the U.S should be made based on sound commercial practices, since there are no tax or other special privileges given to foreign investors.

Investments by non-U.S. individuals or companies are limited in national security matters such as atomic energy and defense, communications, banking, and some other business areas. There are other restrictions: some states prohibit the sale of land (usually agricultural) to foreign investors; certain real estate managed by the federal government cannot be sold to foreigners; the sale of agricultural land to a foreigner must be reported to the Secretary of Agriculture. Legal counsel should review any proposed investment to be certain it is not restricted or limited by federal or state law.

A foreign business operating in the U.S. is entitled to obtain for itself the same federal government-sponsored assistance to business (such as programs of the Small Business Administration) that exists for domestic operators and the same basic tax treatment. Many state and local governments offer aggressive incentives to attract foreign businesses in their particular area. Such incentives commonly include income and real estate tax concessions, financing, and sometimes opportunities to purchase or lease operating facilities at greatly reduced prices.

LABOR AND POLITICAL ATTITUDES

Laboring Americans do not resent foreign ownership of businesses unless jobs are threatened. Conversely, if foreign investment creates jobs, foreigners are heartily welcomed. Some politicians occasionally express concern about foreign investments in the U.S., but investment restrictions on foreigners are not seriously contemplated.