International Services Group

Doing Business in the U.S.A.

In recent days, we have seen Chinese firms becoming more aggressive and entering into the U.S. market wanting to invest. Fosun, a Shanghai based firm, recently purchased the One Chase Manhattan Plaza in New York for $725 million. Greenland Group, another Shanghai based firm, recently became a majority owner in a joint venture that will develop a commercial real estate project in downtown Brooklyn. Earlier this year, a Chinese property developer became a 40% stakeholder in the General Motors Building in Manhattan.

However, as more Chinese firms are looking to do business in the United States, a few things must be said about the differences between the roles lawyers play in China and in the U.S.

Chinese businesses often do not understand the value and role American lawyers play in business transactions. This may be because Chinese lawyers are in some ways different from their American counterparts. Chinese lawyers often do not weigh in on how a deal should be made and do not get involved as American lawyers do in the decision making process. In China, lawyers are often employed to get the paper work filed and fill in the details, but they are not major players when it comes to how the deal is structured. 

Here in the U.S., however, an experienced lawyer is a great asset and is a critical part of how decisions are made. American lawyers often will be able to offer advice on the reliability of the other party you are doing business with and on whether the contemplated business structure will make sense. Having a good lawyer from the start in a U.S. business transaction also will help you plan ahead and find ways to avoid pitfalls. American lawyers often will know what questions to ask, who should get involved, and how to navigate the regulatory and tax codes to structure the best deals.

So if you are a Chinese company wanting to do business in the U.S., the first thing you need to find is good legal counsel to help you assess and plan. Chinese businesses often do not understand that American lawyers have the knowledge and skill set beyond just helping with drafting contracts and paper filings to comply with the law; so Chinese businesses often go into a deal with their U.S. counterpart blind and do not realize their problems long after the deal is made. By then, the legal fees associated with fixing the problems will be much more than what the business would have to pay in the beginning for mitigating the risks.

There is an old saying in the U.S., an ounce of prevention is worth a pound of cure. So if you are a Chinese company looking to do business in the U.S., you should know that finding an experienced attorney is a critical first step to your success. The business deal comes after you’ve heard what your lawyer have to say about the proposed deal.   

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Attorney Spotlight

Joseph J. Dehner Joe Dehner concentrates his practice on multinational business and securities disputes. He counsels a wide variety of companies, domestic and foreign, on issues confronting global business, including transnational investment, mergers and acquisitions, joint ventures, customs and trade issues, international business structures, distribution and agency agreements and the resolution of international disputes.

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