In this episode of Jackson Walker Fast Takes, host Courtney White interviews Houston attorney Manny Schoenhuber about his new book, Mastering Market Entry: USA: The European’s Guide to Making it Big in America. Manny discusses the challenges and opportunities for European companies considering entering the US market.

Manny outlines his key concepts from the book: the three pillars of limiting liability—entities, contracts, and insurance—and the Core Four team members essential for a successful market entry—lawyers, CPAs, bankers, and insurance brokers.

Featured This Episode

Episode Transcription

Courtney White: Hi everyone, I am Courtney White. And this is Jackson Walker Fast Takes. I asked Manny Schoenhuber, an attorney in our Houston office who was originally from Europe, and represents European companies and investors, to talk about his new book, Mastering Market Entry: USA – The European’s Guide to Making it Big in America. Manny, welcome to the podcast, and congratulations on your book.

Manny Schoenhuber: Thank you very much for having me, Courtney.

Courtney White: Manny, I, like you, I’m very excited about your book. And I’d love to hear you tell us why European companies should come to the United States?

Manny Schoenhuber: Sure. And actually, the answer is twofold. First, currently, and unfortunately, to a certain extent, that’s because there’s a perfect storm brewing in Europe. You got high inflation, high energy prices, political unrest, war, and again, unfortunately, from a legal and economic perspective, way too much regulation and bureaucracy or as I’d like to call it Bureau-Crazy, which is making quite difficult for European companies to make a profit in Europe. And I guess the second part of the answer is that, as the saying goes, capital goes where it’s treated best. Here in the US, we have a much more business friendly market environment. Sure, there is uncertainty, especially in an election year. But overall, I would say the business environment is much more positive and optimistic. In Europe, politicians usually regulate with bans and fear. In the US, it’s all about incentivizing businesses to invest and grow. So as you said, I’m originally from Europe. So I don’t say this lightly, because I still have family and friends over there. But right now, European companies looking to invest and grow, are just, at least in my opinion, much better off to do it in the US as compared to Europe.

Courtney White: And Manny, can you just tell the audience, where are you from in Europe.

Manny Schoenhuber: I am originally from a small Bavarian town in the German Alps, between Munich and Salzburg.

Courtney White: And so, in your opinion, what do you think holds companies back? Or challenges them from coming to the United States?

Manny Schoenhuber: Have you ever heard about the disease caused Litigaphobia?

Courtney White: No, I haven’t.

Manny Schoenhuber: So, it’s widespread all over Europe. And it’s the fear of lawsuits.

Courtney White: We apparently don’t have that here.

Manny Schoenhuber: Whether that’s a good or a bad thing, I’ll let somebody else decide that. But yeah, this is really where Europeans think about the US market as being very risky and potentially being sued when they come to the US, the major problem is that they think, or when they fear, they will get sued, that they’d lose everything by entering the US market. And yes, to a certain extent, that’s true, because the more successful businesses are, and then also become, the more likely it is that they will be parties to a lawsuit. But I think that’s anywhere in the world. In my opinion, that fear should, however, not prevent European companies from entering the US market, because there are actually very efficient ways to protect European parent companies, or headquarters against multimillion dollar judgments in US courts, which they’ve all heard about the famous McDonald’s lawsuit. And I actually do share some strategies in my book on how to best approach Litigaphobia.

Courtney White: What are some best tips for companies wanting to enter the US market?

Manny Schoenhuber: So, my book I talk about two key concepts. First, the three pillars of limiting liability. And second, the core four. The three pillars of limiting liability are first entities, second contracts, and third insurance. Entities, like your company structure, and the setup you have over here in the US, I tell clients, I caution European companies to only do business in the US with US entities, they shouldn’t use the European entities that they’ve built over the last years, decades, centuries, and instead set up a holding structure or at least work with one block or entity that shields European parent companies and their assets from potential liabilities. The second one contracts, what we sometimes forget in Europe, and I include myself with it, because when I was still in Europe, I had no clue about it. But the US has a completely different legal system than most of Europe.

Courtney White: We do, we do.

Manny Schoenhuber: We have a British common law, as you know, right?

Courtney White: Yes.

Manny Schoenhuber: And in the US, there’s actually only one states that follows the Napoleon Nik code, which is Civil Law.

Courtney White: Yes, Louisiana.

Manny Schoenhuber: Correct. That’s really the only state in the US that compares somewhat to European laws. So, this is why you have to work with the right contractual language to limit potential liabilities, which is what makes contracts the second of the three pillars of limiting liability. The final one, the final third one is insurance. Sometimes I hear clients to say, okay, yes, sir. European insurance provider will also cover our business in the US. And I tell them, yes, I’m sure they’re happy to do so. But as you and I probably both know, it may not be the best idea, because European insurance providers most likely will find an exclusion that will not cover the million-dollar judgment in the US court. So European companies should always procure adequate insurance coverage for their US operations and for their US business. So, in short, do business in the US, with a US entity, and insure the US entity with US insurance coverage, don’t just rely on the European insurance company to also ensure the US market. And the second concept is the Core Four. That’s pretty much what it always sounds like, the best way to approach the market or the best way to approach any kind of business, no matter what you do is in a team environment. So, you need to put your team together and ideally work with service providers who know your culture. Or maybe you speak your language, like what I’m trying to do for European clients. And I know some of our colleagues do that for other countries and other nations.

So, the Core Four, in my opinion, first and foremost, of course, were lawyers, you need a lawyer to advise you on the law, and regulations that you’re dealing with in the US. But then the second most important one, what also Europeans sometimes forget is your CPA, your Certified Public Accountant, and what Europeans forget, because in Europe, the legal and tax advice most of the time come from the same firm from the same company here in the US, it’s strictly separated. US lawyers, sure, we have tax lawyers at the firm, but we’re not handling tax returns, versus the CPA is they don’t really give legal advice. So, we always have to collaborate. And the third of the core four is the banker, you have to work with the right banks in order to first of all open up a bank account because you’re a foreign owned entity, usually the big banks can’t do that for you, unless you have a certain dollar value in the parent company, a million-dollar value should say and the parent company. And then we’ve already hinted on it the insurance broker. You need the right person to procure insurance and ideally, that’s why I say you should work with somebody with service providers in general that know your culture, know your business from where you from, because those insurance brokers will also be able to work with your parent company insurance in Europe or elsewhere. So those are the Core Four: lawyers, CPA, banker, insurance brokers.

Courtney White: Wow, Manny, it really seems like you have a lot of great tips in your book. And I want to thank you for coming and sharing with us today on the podcast.

Manny Schoenhuber: You’re very welcome. And thank you for having me.

Follow Jackson Walker LLP on LinkedIn, Twitter “X”, Facebook, and Instagram.

The music is by Eve Searls.

The opinions expressed do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.

Meet Manny

Manny Schoenhuber is a Germany-born and Texas-residing attorney who specializes in assisting European investors, companies, and their subsidiaries in the United States. Acting as Outside General Counsel to European clients, his areas of expertise include market entry, contract negotiations, cross-border transactions, litigation, and dispute resolution. With a deep understanding of cultural nuances and legal complexities between Europe and the United States, Manny serves as a trusted advisor, leveraging his U.S. education and European roots. Having worked with companies and investors from various European countries, Manny brings a wealth of experience and expertise to guide his clients through the U.S. legal landscape and ensure their success in the American market.