Distilling U.S. Regulatory Environment and Market Access Considerations for Growing FinTechs10/22/2019The rise of global FinTech has brought markets together and enabled cross-border business formation and innovation, but local regulations still prevail worldwide. The United States, with its developed capital markets, solid investor base and deep pool of talent within the finance and technology sectors, is a desirable location for FinTech businesses to expand or launch operations. But it’s also home to one of the most complex and sophisticated regulatory regimes in the world.
Shearman & Sterling’s Fintech Foundry, this week, launched Entering the U.S. Market: A Guide for Fintech Firms, a demystifying overview of the issues, regulations and resources that FinTechs from the United Kingdom and around the world will want to be aware of before they expand into the U.S.
The Guide delves into the myriad of state and federal laws (as well as regulatory agencies at both levels) that FinTechs must navigate to build successful businesses in the U.S. Topics include:
1. Employment law: How to recruit and retain talent, how to classify full time workers and contractors, and how to create a healthy and legal work environment.
2. Immigration law: Available visas, permissions and travel restrictions faced by visiting workers and entrepreneurs.
3. Corporate law: Including how and where to incorporate, ownership and liability structures and fundraising.
4. Tax law: How state and federal taxes will help determine what form of corporate organization is chosen and how principals are compensated.
5. Intellectual property protections and data privacy: How to lay claim to novel patents and trademarks, and how to protect proprietary and customer data.
6. Digital assets and tokenization: What to do when a digital asset is a security and what to do when it’s a commodity.
7. Regulated financial activities: What to do when a FinTech’s activities make it akin to a chartered bank, a broker dealer or investment manager.
While this all may seem daunting, the U.S. really wants your business. There are federal and local incentives for entrepreneurs to take advantage of, including tax breaks, capital introductions and even the opportunity to earn financing directly from government agencies.
Though a FinTech could conceivably operate in any one of the fifty states, the Guide highlights FinTech hubs where financial and operational support from both the government and private sectors is most abundant. We also explore incubators, accelerators and innovation labs that can serve as a nexus for entrepreneurs looking to share ideas, experiences and tactics.
Whether you’re setting up in the U.S. or just thinking about it, the Guide will help you formulate the right questions and has a handy directory of experts and agencies who can help come up with the answers you’ll need.
Access the full Guide here.