Members of the FinTech community gathered for a breakfast roundtable, at the picturesque Somerset House in London, to discuss the ins and outs of expanding into the United States. Sponsored by JobsOhio, Go West, Young Startup – The launchpad for US success, was part of the TECHTalents Society roundtable series, held during the inaugural UK FinTech Week.
Speakers included: James O’Toole, Co-Founder and Chief Business Officer, ID-Pal, David Daley, Private Client Tax Director, U.S. Tax & Financial Services, Ltd. and Terry Gore, Director of Financial Services, JobsOhio. Topics of discussion included US tax idiosyncrasies, the realities of setting up a corporation in the US, the on-the-ground experiences of Irish FinTech ID-Pal and the benefits of choosing the state of Ohio as the landing pad for scaling into America.
ID-Pal is a Dublin-based FinTech that provides an Identity verification app that allows businesses to use a simple software tool to manage the KYC process for client onboarding. O’Toole shared his story, of working in partnership with JobsOhio and their own experiences in the US market.
O’Toole offered four pieces of advice for any UK or European company considering the same journey.
- Work with local bodies and partners who can help you navigate the local market.
- (i.e. local distribution partners, development agencies and advisers)
- Commit to US expansion but don’t rush the process.
- (e.g. evolve and iterate through analysis, PoC, Pilot, early adopter programme, full scale launch stages)
- Keep it simple for as long as possible.
- (i.e. focus on business fundamentals and postpone complex non-commercial decisions until after you know you can sell into that market)
One interesting point O’Toole made about expanding into Ohio, rather than the global financial centre in New York or the tech region in Silicon Valley, was the ease of access to the US’s vast community bank network. In Ohio, ID-Pal met with senior bank executives faster and in greater volume than they would have, had the company chosen to be one of many startups basing themselves on the countries east or west coasts.
This point was echoed by Gore of JobsOhio who informed the roundtable that Ohio was the fifth largest financial services sector in the US, whose job market was fed by a strong university system of over 200 colleges and universities that turns out nearly 45,000 graduates annually who are potential candidates for jobs in financial services. Investment bank JP Morgan employs over 20,000 people in Ohio. Gore labelled Ohio a ‘boomerang’ State, meaning that many young people chose to return to the State after working on the coasts after a few years. Wages are roughly half and office space is ¼ of what it is in New York and California, said Gore. That reduced costs of living is coupled with the fact that Ohio has a lower cost of doing business with no corporate tax rate.
The US is often described as ’50 separate countries’ to those companies looking to navigate that market. US tax specialist Daley emphasised this point by remarking that “there is no such thing as a US corporation” as all companies must pick a state to be incorporated in (which for various reasons tends to be Delaware) and a state in which to establish a headquarters. With its lower costs of living, wide network of community banks and ‘business-friendly’ municipal environment – Ohio took centre stage as the smart choice for those looking west for expansion during this UK FinTech Week TECHTalents Society roundtable.