Foreign investors continue to open offices, US headquarters and even manufacturing locations in the greater Los Angeles area. For many global companies, LA remains a strategic entry point into the US market as well as one of the most profitable to operate. Entertainment, Silicon Beach, advanced aerospace/transport, MedTech and biotech. But before rushing in and risking the investment capital and opportunity, there are five things foreign investors should consider:

1. LA is a Huge Region, So Don’t Get Lost!

The City of Los Angeles has 4 million residents Southern California includes more than 24 million residents. That population base means great opportunities and potential risks.

Siting your location is the most important decision as the foreign investor. Traffic in the entire region is a major challenge, so having the right location to minimize time spent on the freeways is a key consideration. As with any major metropolitan area, there are many geographic subtleties. The city of LA, in particular, is a series of villages without a city center. Investors also need to consider issues like costs, access to logistics, access to talent and access to suppliers.

InBoundLA works as a concierge service and does not represent any city, real estate group or financial entity. It is a not-for-profit entity focusing on economic development. As such, we are free to bring our clients a series of options and work with them to find the best solutions. For new-to-market foreign investors, we generally favor a lean start-up approach so that there is time for the investors to adjust to the US market. InBoundLA has coworking space near LAX Airport to facilitate the transition.

2. LA Has a Unique and Broad-Based Talent Pool

The biggest attraction for most investors is the talent that is available in LA. Hollywood remains the global home for creative types, but not just in film. This talent is leading the way in related digital media applications (gaming, online marketing and fintech). On the hardware side, engineers are creating the next generation of aerospace innovations (SpaceX) as well as medical devices. Overlaying all of that is a diverse population with understanding and language skills from every part of the globe.

InBoundLA specializes in helping companies build diverse teams. With our unique cross-cultural training programs and access to HR recruiters, we work with the companies to put together the initial local team and to grow it as needed.

3. LA Offers Great Value Options for New-to-Market Investors

LA has the reputation as an expensive area, which it is. However, compared to Silicon Valley or New York, cost of living is lower. In addition, employees report higher quality of life satisfaction. It may surprise many living outside of the US to learn that LA has the greatest number of employees in manufacturing (over 500,000) of any city in the US and is the hub for advanced manufacturing in the US. We have worked with companies that have low valued-added manufactured products to use the region for prototyping and for short product runs tapping into the numerous contract manufacturers in the region. While there are regions with greater or lower costs in the US, LA remains a great value for those foreign investors wanting to set up initial operations inside US boundaries.

InBoundLA, with its extensive contract network and understanding of local incentives works, with international companies to design a specific ‘soft landing’ strategy. As concierge agents, we give our clients options.

4. Tax, Accounting and Legal Compliance are Crucial

Some of the more complicated issues for doing business in the US arise from tax, accounting and legal issues. The US is known for good reason as a litigious society and not getting the US based entity properly set up can open the company to costly legal battles. One of the questions we hear frequently is ‘How can I know what I don’t know?’ As part of establishing a presence in the LA Market, firms need good tax, accounting and legal support.

InBoundLA has a network of tax experts, accountants and lawyers that it works with. As an independent not-for-profit agency, we present the participants in the InBoundLA program with options from our network.

5. Having the Right Connections Is important

The greatest challenge for foreign investors is getting connected in the local market. In LA, business is conducted at a fast pace in an informal setting and personal relationships remain an important element in closing sales and business deals. In addition, government entities in the region have developed a series of programs and incentives to foster economic development. InBoundLA worked with one client that needed a demonstration project hosted by a government entity. We set up a series of appointments with various elected officials and government agencies and, in the process, identified a finance mechanism for the project.

The concierge packet of services offered by InBoundLA reduces the risk of failure and decreases the time required to ramp-up operations. Since we are an independent non-profit economic development agency, we are not “selling” any particular product, real estate location or service. For small and medium sized businesses wanting to set up operations in the LA regional market, InBoundLA keeps the client in the driver’s seat.

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