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Tips On How To Do Business In Washington State

Why Washington State?

Starting a new business or entering a promising industry is always an exciting and challenging undertaking – and Washington State is the right location to start, grow and expand your business ventures. It is a unique place where new ideas, nurtured in a dynamic and business-friendly environment, become international icons. Companies like Starbucks, Boeing, Microsoft, Nordstrom and Amazon have not only become highly revered brands, but have changed the very face of their respective industries.

Advantages and Incentives of doing business in Washington State

Washington State has 39 counties to choose from, each offering a different set of competitive business advantages. Equidistant between Europe and Asia, Washington States’ ports and marine industry serve as a gateway to opportunity and a platform to reach global markets.

One of the main incentives for any international investor, when starting, acquiring or partnering in a business venture in Washington State resides in an attractive, business-oriented taxation system. In addition to having no personal or corporate income tax, the state offers innovative partnerships at the state, regional and local level to facilitate your business relocation and increase your growth potential.

Alongside with the tax incentives detailed above, Washington has 11 Free Trade Zones (FTZ) which refer by essence to business zones considered to be outside the U.S. Customs Territory. FTZ can offset customs advantages available to overseas producers who compete with domestic producers.

What are the benefits to a zone user?

  • Duty Exemption. No duties on or quota charges on re-exports.
  • Duty Deferral. Customs duties and federal excise tax deferred on imports.
  • Inverted Tariff. In situations where zone production results in a finished product that has a lower duty rate than the rates on foreign inputs (inverted tariff), the finished products may be entered at the duty rate that applies to its condition as it leaves the zone (requires prior authorization).
  • Logistical Benefits. Companies using FTZ procedures may have access to streamlined customs procedures (e.g. "weekly entry" or "direct delivery").
  • Other Benefits. Foreign goods and domestic goods held for export are exempt from state/local inventory taxes.

Also, the Washington State Department of Commerce through the work of a trusted and experienced Business Services team offers to registered Washington State businesses its services for free.

Merger & Acquisitions (M&A), Joint-Ventures (JV) and Due Diligence

There are numerous ways of engaging in business in Washington State that fit different needs and purposes. Sometimes, instead of starting a new business or growing the entity organically, there are other options available, such as Merger, Acquisition or Joint Venture with another entity.

A Merger entails a process when two companies jointly agree to move forward as a single new company. Acquisition refers to a situation where a company takes over another and clearly establishes itself as the new owner. Generally, mergers and acquisitions are usually completed by the team of professionals, including attorneys, investment bankers and accountants.

A Joint-venture consists in a business arrangement in which two or more parties agree to pull together their resources for the purpose of accomplishing a specific task or project. In this type of arrangement, the venture is its own entity, separate from the other participants’ other business interests.

There are numerous benefits to the business arrangements mentioned above. Increased market share, product lines, profits, in some cases even tax benefits. All of it depends on the business set up and on the company you acquire, merge or create a joint venture with.

In this regard, no matter what transaction might be of interest, it is crucial to perform due diligence. Due diligence is an investigation of the company for the transaction and is especially important as it allows the team of the professionals, especially your attorneys to understand the nature of the transaction and come up with the best strategy.

Due diligence can also effect the purchase price. Failure to perform due diligence can defect a common law claim for fraud, meaning that generally, if the buyer cannot recover on a fraud claim if the alleged material omission or misstatement could have been discovered through the exercise of due diligence.

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