bluegold

Hi all,

I'm looking to open a US branch of my company in the next year. I've already spoken to an lawyer on the visa side of things (someone recommended on here many times) and they recommended an accountant and general business attorney they work closely with.

My question is what are fair fees for for accounting services in the US? I know that's a pretty big question, but generally for consultation, basic LLC tax filing, personal filing etc?

The accountant has told me an hour long call is $250 and they can discuss options and further fees during this call. Does that seem fair?

I guess my reservation is that my UK accounting firm (a decent sized, well known firm) charges nothing for phone calls, emails etc and a really reasonable amount per year for all my business/personal accounts.

I guess I'm just put of by paying $250 to get told how much the fees even are!

Also any recommendations for accountants who deal in US subsidiaries of UK companies etc much appreciated.

Thanks in advance

Pulaski

$250/hr is reasonable for an hour of time for a professional accountant. ..... Whereas "your" accountant in the UK fields your questions by phone because you are an established client who pays fees for other services, and your phone calls are (presumably) only a small overhead cost for the entire service-fee relationship for your accountant.

ian-mstm

The accountant's fees are a tax deduction for your existing company.

Ian

bluegold

OK great,

I guess I just wanted to clarify as my experience has only been with UK accouting firms. None of whom charged for initial discussions about fees and services they could provide.

If this seems like a fair price for US companies that's no problem.

Like you say, at least it's a deductible.

Thanks for the replies, and also thanks for the contributions on many other threads I've previously read on these forums. Extremely helpful.

Pulaski

I believe that an "initial conversation about fees and services" would/should be free, but to me at least "discussing options" sounds more like advice that you will receive on the alternatives for structuring your business, accounting/bookkeeping, and managing taxes.

So you might want to check that you're both on the same page before the meeting, and there is absolutely no harm in telling the accountant that the lawyer didn't charge for an initial meeting, and accountants in the UK don't either, so you're wondering why he/she wants to bill you.

Rete

Depends on who your client is. If it is an individual, you might not charge for a consultation but if you are a business accountant, you might well charge for a consultation.

Just like in the legal field, hourly rates depend on the knowledge and experience of the attorney you are consulting with. I've worked with attorneys where the hourly billing rate was $650 per hour and with first year associates where $250 per hour was the norm. A paralegal would bill at $75 to $150 per hour.

Also it depends on the area of the country you were practicing in. Little Rock, Arkansas will charge less than a New York City accountant.

I doubt you will find a standing fee chart anywhere. Perhaps you might want to network with other accountants on social media networks like Linked In and get a feel from them what they charge.

petitefrancaise

Do you need an accountant?

LLC is pretty straightfoward.

An accountant recommended this book to me as a primer...

https://www.amazon.com/gp/product/B0...?ie=UTF8&psc=1

bluegold

Thanks guys, this is all very helpful.

Pulaski, you're right, I think I need to clarify exactly what the purpose of the call is, if we move to advice and case specific topics then the payment is justified.

Rete, agreed, it's a Los Angeles based mid sized firm so based on this the fees seem fair.

Petitefrancaise, I'll definitely get the book, I like to familiarise myself with the basics. As this will be a cross country subsidiary, with staff across both companies moving between locations and accounting being an area I'm honestly pretty bad at, I prefer to know that a specialist is looking at it. Especially as I'll later be making a visa application which I'm will obviously lead to a lot of scrutiny of the company structure.

Thanks for all the advice!

petitefrancaise

oh yes, you definitely need an accountant. The book is very simple and very basic, which was really good for me but perhaps you need a bit more....

Good luck with it all.

PF

morpeth

My first reaction was perhaps your immigration/visa attorney isn't as close to the firms he is recommending- I would have thought in providing the introduction he let them know you were already a client, and what the potential was, and thus an initial call would have been free . But if it was to be an hour long call in which the accountant was providing his professional advice , for a very good accountant on the east or west coast that wouldn't be necessarily a bad fee for an hour work- in particular if you are considering an LLC structure. That sort of structure can be beneficial, but not always.

The standard tax filing for an LLC or C corp is fairly mechanical, it is the structuring consultation and tax planning where the real cost or benefits. Definitely if an LLC being considered lawyer shouldn't draft documents before clear tax and financial structuring considered. If it were me, I would also consider having your UK accountant on the call or discuss afterwards with him.

My own rule of thumb is annually I would look at accountant fees, and besides standard tax filings, determine whether accountants advice benefitted me more than what his cost was. Invariably in my experience in international business, a good accountant will pay for himself several times over.

Good Luck !

morpeth

That book I have seen recommended as well. However LLC's , especially in a cross country situation, are anything but straightforward, and definitely avoid a California subsidiary like the plague if you can avoid it ( or if you have to have consider it being owned by a Nevada or Delaware Corp or LLC). If you will have personnel working in US, and in particular a state like California, you or your financial manager should understand very well (a) the USA state concept of Nexus, as well structuring affairs for best tax and cash flow benefit for both the US subsidiary and also the UK parent.(b) intercompany pricing rules (c) flow through effects of an LLC structure and what type of LLC structure. (d) debt vs equity considerations for the subsidiary.

bluegold

Good advice Morpeth,

I'm going to shop around a bit and at least get some fee comparisons. It's what I'd do with every other supplier, don't know why I'd think of this any differently.

My lawyer has stated he's worked with this firm before on a number of similar cases to mine and was quick to recommend them. He did say to mention his name which I did, but I'll reiterate in my reply.

Absolutely agree. I'm happy with my UK firm, they cover all the usuals (returns, VAT, payroll etc) for an agreed monthly fee and I can email whenever and arrange meetings and phone calls (within reason) at no extra charge.

bluegold

Thanks for all this,

I've already been reading on some of the above already, but really, anything like this is extremely helpful.

Any additional topics you think are worth considering, or questions to put to accountants when discussing basics would be much appreciated.

Took a good few years to get my head around UK regs (Standing start, I had no formal business training etc, first company). At least I'm tackling the US prepared that there's always a hell of a lot to learn.

morpeth

Pretty much fee quote for basic services should be relatively standard, it is the structuring services that are key. If the lawyer said simply said mention his name, then his relationship with them not as close or strategic a nature, as you might have hoped for. Intercompany pricing rules and their implementation a tedious topic, but I gather you are in a service business, so that can be a key factor- and difference in tax rates between USA states can be quite high, hence why I brought up the issue of Nexus- and California a very aggressive state to do business in ( as is New York).

I once had on Christmas eve two New York state tax auditors show up unannounced in my office in Menlo Park , California about some nexus questions - they left empty-handed as we had taken great care in structuring how we did business.

morpeth

Without knowing nature and size of your business, and potential business in USA, hard to give specific advice. I have gone through this process many times in my career.

1. Important to understand effect on your UK taxes, hence why the issue of whether a LLC or C corp is important. And what are the federal tax rates but also state tax rates you are dealing with in USA. Hence the Nexus issue- no reason to draw more income to be taxed in California when it could be taxed in Nevada for example.
2. Intercompany Pricing : again first what does your accountant say from a UK perspective, both for expenses that can be recorded in UK, but also for revenue if UK company bills US subsidiary.
3. Debt vs Equity : How will or should US subsidiary be capitalized ? In some instances lending to a subsidiary at an interest rate acceptable on both sides of the bond can be a good strategy.
4. Fiscal Year : Which fiscal year is possible on the structure you choose, this can have an effect. For example in one instance we formed a French subsidiary and managed so losses could be deducted in USA, but with a different fiscal year- was a small business and ended up the extra accounting work worked against the perceived savings.

Just a few thoughts,