New York City - Land Of Opportunity

Wednesday, October 1, 2008 - 01:00

Editor: What high points of your career would you like particularly to highlight?

Bible: Each chapter has really had its own memorable moment. Clearly Amper in New York has been a great experience - a great firm, great people to work with and great clients. We are growing significantly in New York. It has been a lot of fun moving back to the East Coast from Michigan, where I served as Chief Accounting Officer for General Motors. At GM, I was exposed to many significant transactions, including the divestitures of EDS, Delphi and Hughes and then subsequent acquisitions of Fiat, Fuji, Suzuki, Daewoo and Saab. Earlier in my career, I worked for Deloitte & Touche in New York, which gave me the opportunity to work on a lot of diverse engagements, so I have been really fortunate.

Editor: Why would a global business with headquarters outside the U.S. want to consider New York City as a site for its U.S. Western Hemisphere headquarters?

Bible: There are so many reasons you want to have New York at the top or near the top of your list for the Western Hemisphere. First and foremost is access to capital, notwithstanding the events of 2008 and, more recently, of the last few weeks. It is the world's financial capital. The city provides access to a lot of funding, and the markets here are very deep and very efficient, so access to capital ranks at or near the top of the list. Also, the human capital pool is phenomenal in the tri-state area and that includes educational institutions. New York provides entre to consumer and business markets. The New York Metropolitan Area is a significant economy in and of itself. But more broadly, having a New York presence can help open up the U.S. market for a foreign business. New York is, historically speaking, a good launch point for penetrating the North American marketplace. If you are coming from Europe or almost any country, the recent weak dollar has made it very attractive for living and investment. Lastly, New York has a lot of neat social and cultural aspects to it - from the theater and the entertainment community to the restaurants and the many pockets of ethnicity.

Editor: Generally speaking, what aspects of the business environment attract businesses to New York - the concentration of professional and financial resources, legal climate, regulatory climate, quality of labor force? The universities and teaching hospitals, think tanks, other similar businesses, or trade associations?

Bible: It's like "the Force" - it's all of the above. At Amper we just deal with the professional and financial resources. New York as a market for professional service firms, particularly the law firms, is probably the strongest anywhere in the world, as are the banking resources. The labor force, universities and teaching hospitals rank among or near the top of the list for the world. As for think tanks and similar businesses, New York is the home for multitudes of businesses and trade associations. All of those are things that would cause someone to look hard at New York. If I had to pick one feature, I would focus on the financial and human capital as the two great things that New York has to offer.

Editor: What tax and other incentives are available to attract businesses to New York City?

Bible: Amper often advises foreign-owned businesses to consider three types of tax incentives. Overall, these are preferential tax rates, depreciation allowances and tax credits which may extend anywhere from the capital deployed in a business, to investments the company has made, to the wages paid to employees. There are credits for real estate taxes and also credits against other taxes. The credits themselves may be centered around either zones in New York or industries in New York.

For instance, Empire Zones offer tax credits up to 25 percent of the qualified investment for companies in Hunts Point, Chinatown, East Harlem, Point Morris, Brooklyn Navy Yard, South Jamaica, East New York, and parts of Staten Island and Yonkers. There is also the Investment Tax Credit (ITC), which may be up to 10 percent, for qualified businesses that create new jobs and invest in production property and equipment, who may qualify for tax credits up to 10 percent. Other tax credits exist for Research & Development, which may be up to 9 percent.

On the industry side, there are also beneficial tax credits for emerging technology companies. Amper serves many tech companies, including software, new media, IT services and related companies - foreign and domestic - that benefit from both qualified emerging technology employment credits and capital tax credits. Other industries that need to consider tax credits include so-called green businesses and film production companies. These companies may qualify for partial abatements of property taxes, commercial rent tax reductions, green building credits, alternative fuel credits such as biofuels and so forth.

Besides tax credits, a company might consider different tax rates, which are often special taxes for telecommunications, vending machines, utilities and alcoholic beverages to name a few.

In short, there is a fairly substantial list of credits, but it is fair to say that there are plenty of economic incentives for someone to consider Manhattan for a business location. Manhattan is a much less expensive place to have a business than London, Tokyo or countries like Switzerland and Germany in terms of measuring the cost of real estate and labor in comparison to what you can get elsewhere in the world.

Editor: Among the areas in New York City, which do you feel are most attractive as business locations for foreign companies?

Bible: A lot depends on the type of business. New York has long had or developed neighborhoods that focus on a particular business line, such as the apparel district, the diamond district and most famously Wall Street. Clearly, at the former World Trade Center site there are ample incentives for companies to relocate and invest. Midtown is probably the most expensive from a business location standpoint. In terms of all real estate, the West Side, the Lower West Side, downtown, and the Lower East Side tend to be much less expensive. Labor probably isn't a cost factor in terms of location with mass transportation to all areas of the city. Given the mass transit capabilities in the tri-state area, no neighborhood is inaccessible to any one group of people.

Editor: How does New York City and its suburbs' quality of life measure against other major business hubs?

Bible: I have lived in the Midwest, the South and in the New York area, and there is not much that New York City is lacking. Whether you live in the city or you live in the suburbs and commute, the educational systems, the art, the entertainment, and the potential employment opportunities here all make for a nice quality of life.

Editor: New York City is home to more Fortune 500 companies than any city in the U.S. Why do you think these companies invest here, and how will that affect potential businesses looking to make New York City their home?

Bible: Many have been here for quite some time. If you think about the city throughout the 19th century and what happened in this country and the world, New York was the place to be if you had a significant business. Now that we have electronic capabilities, the Internet and satellite communications, the factors that will keep those Fortune 500 companies here will be - the quality of the work force, the quality of life, the educational institutions and the access to capital. It would be easy in this day and age to move out of the New York area and telecommute, but New York City keeps people here because it is such an attractive place to work and to live.

Editor: In attracting companies seeking a U.S. location how important are the activities of state and local economic development organizations?

Bible: They are key. They have the most value when someone is in "an incubation" or startup mode where a small company is wrestling for every dollar that it can get its hands on, and such support organizations add the most value. Look at HSBC Hong Kong Savings Bank. Clearly they would have been an influence on the citizens of New York if they were given real estate tax credits, bank credits and income tax credits.

Editor: How does New York City's 37 percent foreign-born population factor into a foreign client's decision to invest in this area?

Bible: It's part of the fabric of New York. If you look at the old ethnic neighborhoods - first a couple of families came over, then more families and their relatives and then friends of relatives and before you knew it, you had a small economy unto itself. If you are moving here without a knowledge of the area or the bilingual skills you would need, it helps to have a diverse population with ethnic pockets.

Editor : What is the most challenging factor in working with foreign clients?

Bible: We serve many foreign companies and expatriates and find the work rewarding and exhilarating. However, as you say, there are some practical challenges. One is communication. What we try to do is get the client linked to the right resources. In New York we have accounting and tax professionals conversant in Spanish, Indian dialects, and perhaps two or three different Chinese dialects, including sub-dialects of Mandarin. For many foreign companies, the first thing we offer is comfort by literally speaking their language. Many Americans expect others to speak our language and that is not always an option. At our Amper office in New York we make a concerted effort to have as many translators of foreign languages as possible, especially when we are dealing with heavy documentation. Beyond language, we are members of a consortium of more than 23,000 accountants throughout the world. The consortium is called Baker Tilly International and our membership means we can help companies anywhere in the world.

Editor: Before deciding on New York City as a location or selecting a particular location within the city, why should corporations seek the help of an accounting firm such as yours?

Bible: This goes hand-in-hand with structuring the investment. The United States' tort system is unique, requiring as much protection against litigation as is possible. We provide a structure that allows for growth as well as a structure that will provide maximum tax benefits. There are a whole series of considerations, so before taking that first step into this marketplace a company wants to make sure it has the right advisors in place.

Please email the interviewee at bible@amper.com with questions about this interview.