NYC Is the New German Startup City

NYC Is the New German Startup City

NYC Is the New German Startup City

Bye bye Silicon Valley, hello Big Apple. German startups are attracted to New York, but what should be considered in terms of visa application, company establishment, living, and working in the U.S.?

New York – A Startup City  With Great Potential

For online startups whose service or product on the web is relatively easy to adapt for international markets, expansion is often a central point in corporate planning. When looking at the American market, most founders are attracted to the startup mecca, Silicon Valley. However, New York also has an interesting startup landscape from which well-known companies like Kickstarter, Etsy, and Fab.com have emerged. Besides, the online advertising industry’s home is in New York with Google and Facebook having offices in the metropolis.

When taking the first step across the big pond, New York presents an attractive starting point. In addition to an exciting atmosphere, the city offers numerous startup institutions. There are many exciting business contacts, including a connection to the German headquarters that can easily be maintained through good flight connections with a relatively short time difference. For all startups that plan to gain ground in New York City, here are some tips on what is important in terms of company establishment, living, working and visa requirements.

Establishment – How and How Expensive?

The establishment of a company can be managed through a specialized law firm with German contact people (for example http://www.hr-ny.com/). The professionals know exactly what legal foundations must be laid, which insurances must be completed and which type of company makes sense in terms of taxation. For example, companies may be officially registered in Delaware due to tax reasons but have its office in New York. These legal services with statutes cost around US$ 5,000.

In order to perform all pending transfers smoothly, an American bank account should be opened at an early stage. For this purpose the founder should choose a nationally well-represented bank like Bank of America. Additional points of contact concerning the set up of a company are offered by institutions such as the NYC Startup Weekend (http://nyc.startupweekend.org/) or the New York Economic Development Corporation (http://www.nycedc.com/).

Living and Working – In Which District?

In the initial phase, founders typically resort to cheap hotels or Airbnb apartments. When searching for the first office location, a suitable neighborhood needs to be selected. For this purpose, one should consider the following districts.

Manhattan – the classic:

Manhattan is located in the heart of the city, making it a classic among the business districts. The big advantage: within five subway stations one can reach everything and everyone. The big disadvantage: of course, the central location has its price and is for many startups outside the budget limit. A good alternative is Lower Manhattan. Due to the decline of the financial industry, the rental situation is friendlier there. 

Brooklyn – the startup city stronghold

In the last ten years, Brooklyn has turned itself into one of the absolute “in” districts of the city and is just three subway stops from the center. Since it is much less expensive than Manhattan, it has become the stronghold of the New York startup scene. However, with a rising number of interested people, the rent is also increasing slowly but surely.

Queens – startup quarter in the making

Planned by urban development as the new center of the startup scene, Queens is considered a rough diamond. Also only three metro stops from the center and with rents, which are up to two-thirds lower than Manhattan prices, the quarter provides many advantages for startups. Young companies benefit from various co-working spaces but the change in Queens has just begun.

By the way, in the metropolis of millions, public transportation is the best way to go from point A to point B. In the streets of NYC, taxis are hard to get, especially during rush hour, and often take more time than subways and buses. Having your own car makes little sense as well if only because of parking rates. If you happen to need a vehicle once in a while, car sharing provider, Zipcar (http://www.zipcar.com/) offers a good alternative.

Applying for a Visa – What Kind? At What Price?

In principle, the visa application can be carried out without a lawyer. However, the appointment of a professional can simplify and accelerate the process. The opening of a new branch in the U.S. usually costs between $2,000 and$7,000. For German companies, there are two types of visas that are usually applied for. 

 L1 (Intra Company Transferee): If a company has an office in the U.S. as well as in another country, e.g. Germany, this type of visa serves for transferring German employees to the American branch, provided that they have been working at least one year in the company. Normally, the visa is valid for three years. However, if the entering person initially sets up the U.S. branch, the duration of the visa is limited to a year. The advantage of the L1 visa is that it can be used to apply for a green card. Spouses may also be able to enter and work with an additional visa.

 E1 / 2: If a company has its headquarters in Germany, employees who are responsible for a substantial transaction between the home country and the United States, or a substantial investment in the United States, can enter the country with the E1 visa. Through the E1 visa, spouses are also eligible to enter the U.S. This is particularly interesting if the employee concerned has worked less than a year in the company. The visa should also be directly used to request the Social Security Number at the Social Security Administration. (http://www.ssa.gov/ssnumber/).

Marcel Pirlich

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