Washington, a Global Leader in the Aerospace Industry
Washington State is a world-class platform in conceptualizing, manufacturing and supplying aerospace R&D, and commercial aircraft products. Aerospace industry in Washington profits not only from its key geographical location, positioning Aerospace companies as a gateway to Asia, but also accessing Eastern European and the Gulf Countries. In this aspect, with over 82,000 skilled workers and more than 650 companies, Washington has one of the most robust and dynamic clusters in the world. Home to cutting-edge aerospace R&D in composites, avionics, and alternative fuels, Washington is at the forefront of the aerospace industry.
Our attorneys at CHUNG, MALHAS & MANTEL, PLLC, are committed to promoting exceptional service and quality legal representation to their domestic and international clients, ranging from investors, suppliers and manufacturers to explore their business ventures both in Washington State and worldwide.
Having affiliate offices in Zurich, Switzerland, Dakar, Senegal and Doha, Qatar, allows our attorneys to provide their clients with multi-jurisdictional solutions to address their needs in matters of Taxation, Export regulations, Intellectual Property, Investment Immigration, and International Business Transactions. Meeting the demand of the increasingly globalized Aerospace industry, our reach is global. We understand that our clients’ goals in reaching foreign markets necessitate sophisticated legal representation in multiple jurisdictions, taxation and regulatory compliances across the United States and international frontiers, and application of free trade and other international agreements. This requires a stately communication and negotiation, forging key partnerships and strategic international Joint Ventures.
At CHUNG, MALHAS & MANTEL, PLLC, we pride ourselves with a diverse multinational team of professionals that possess aptitude and expertise in working with different cultures, languages and legal systems. We value long-term relationships and solid partnerships built on trust and competence. Our goal is to work side-by-side with our clients to deliver concrete results of increasing profitability and expanding market-share, utility of skilled foreign labor at lower costs, free trade zones, tax incentives, tax free jurisdictions and government subsidies.
We assist our clients with, but not limited to, the following legal services:
- State and local sales;
- Use and property tax planning issues;
- Leasing an aircraft;
- Properly licensing your business in Washington State (aircraft dealer, registration, aircraft fuel distribution, fuel tax return etc.);
- Ownership trusts;
- Original equipment manufacturer agreements;
- Aircraft management and charter agreements;
- Joint ownership arrangements; and
- Export control regulations – acquiring proper licenses and agreement from ITAR and AER depending on your item category and/or classification.
Taxation is one of the strategic areas of the law that is particularly relevant for many of our Aerospace clients. When supplying, manufacturing, buying or selling parts, aircrafts and such, at an international scale, businesses and investors regard Taxation as a key component, before initiating any decision-making process.
Whether your goal is to purchase an aircraft in the United States, or set-up a manufacture in Qatar, our attorneys at CHUNG, MALHAS & MANTEL, PLLC provide you with strategic due diligence and in-depth knowledge on tax incentives, benefits and implications. There are many trade and tax-specific treaties worldwide that one could benefit from, by consulting an international tax attorney who will assess and leverage with you the opportunities that await your business growth and market-share expansion.
Washington State offers a number of tax credits for business entities and individuals to conduct business in the state. These incentives may be claimed by manufacturers in the aerospace industry or those involved in the research, design, and engineering of aerospace products or services. These incentives are amplified as a result of Washington State’s lack of an income tax. These tax incentives include but are not limited to, the following:
- Reduced Business and Occupation (B&O) tax rates for the aerospace industry;
- B&O credits for new employees;
- Sales & use tax exemptions for aerospace manufacturers for computer hardware and software;
- B&O credits for expenditures for aerospace pre-production development; and
- Special cost recovery Programs for business renewable energy systems.
Joint Ventures and Mergers & Acquisitions
Each business is different and requires a complete weighing of the pros and cons in choosing the business entity structure most conducive to their business. These concerns are compounded in the aerospace and defense industry where costs and risks are greater as a result of the industry’s international nature. For foreign companies looking to do business in the United States, the challenges may seem daunting in weighing the pros and cons of selecting the right entity.
As such, there are number of business structures where an owner, manufacturer, supplier or investor may choose depending on the size of your company, the taxation bracket you intend to be categorized in, the amount of liability you agree to share, and very importantly, which ownership structure you wish to build your business upon.
These factors among many should help you figure out what is the right path for your business entity. You should always seek the legal advice of an attorney before engaging in a business structure, without being aware of the many tax benefits or pitfalls of choosing an entity structure, over another.
In this regard, our firm advises our clients in negotiated Mergers & Acquisitions as well Joint-Ventures and International Joint-Venture partnerships. The distinction between what constitutes a “merger” and what constitutes an “acquisition” from a legal point of view is relatively simple. A merger is a legal consolidation of two companies into one entity, while an acquisition is one entity’s legal absorption of another entity.
The benefits of entering into an international joint venture are numerous. A foreign entity would gain access to a particular market, limit its risk and liability, and gain the valuable experience and expertise of its co-venture. It is the ideal mechanism for acquiring experience in a market and the first step to building a mutually beneficial relationship that may result in a future merger.
Today, the enormous value of the Intellectual property rights is challenged by the effortless access to information in each part of the world. Companies and individuals who need to protect their intellectual property (IP) rights should approach that goal with care and clear guidance. Our team provides creative strategies, knowledge and global IP experience. We advise clients on the latest changes to intellectual property law and assist them with obtaining, enforcing and managing their IP rights. We provide assistance in negotiating contracts, licenses and technology transfer agreements.
At CHUNG, MALHAS & MANTEL, PLLC our attorneys provide competent explanation of the law and responses to our clients’ inquiries, meeting them in person and addressing all of their IP challenges. Our multicultural team of attorneys represent international and local clients in the most efficient way, using their in depth understanding and diverse legal systems and jurisprudences. Our expertise in both the European and the United States IP legal systems and practices allow us to find the best solutions tailored to your goals and needs. Despite of presence of international treaties and agreements in the IP field, only significant professional expertise in certain national legal framework can assure well protected and enforceable IP rights.
Export Control Regulations
On April 16, 2013, the Obama Administration, through the departments of State and Commerce, issued important new rules as part of its Export Control Reform (ECR) initiative. These rules, which are the first in a series of new State and Commerce regulations have become effective October 15, 2013 and have a major impact on the aerospace industry, which is heavily regulated under U.S. export control laws.
Specifically, the rules will transition control over a number of items manufactured for the aerospace industry from the International Traffic in Arms Regulations (ITAR) to the Export Administration Regulations (EAR), requiring aerospace companies around the world that manufacture, export or re-export ITAR-controlled items to evaluate and amend their current authorizations and restructure compliance activities in order to meet tight regulatory deadlines and avoid violations of the new laws.
Under the new rules, ITAR Categories VIII (Aircraft and Related Articles) and XIX (Gas Turbine Engines and Associated Equipment) will now list aerospace items that are subject to those categories in detail, including naming certain aircraft, and parts thereof, that remain subject to the ITAR. For example, revised Category VIII lists thirteen types of aircraft (e.g., bombers, fighter bombers, attack helicopters) that are covered. Similarly, new Category XIX describes certain types of turbofan and turbojet engines covered based on thrust capacity and other characteristics, but also identifies certain engines by name that remain subject to the ITAR (i.e., GE38, AGT1500, CTS800, TF40B, T55, TF60 and T700).
The ECR initiative aims at building a clear classification of ITAR-related items versus EAR-related items, by using a “positive list” detailing every specific item category. Every aerospace business should always seek legal counsel when looking to obtain adequate licenses from the right governmental entities. Should you fail to comply with these new rules, exporting improperly licensed items internationally may result in being heavily fined by the State Department.
Most recently, a Bellevue-based aerospace and defense technology company has been assessed 20 (USD) million in civil penalties by the State Department for inadequate controls that led to the unauthorized export of defense articles and technical information.
Should you be interested in acquiring more in depth knowledge of the described above areas of Aviation Law, we welcome you to download either the informational brochure Take Your Business to New Heights or the full publication Aerospace Legal Guide to Taxation, Intellectual Property & Business Transactions (both in PDF format).
Our attorneys are fluent in English, Arabic, Berber, Ukrainian, French, Hebrew, Japanese, Mandarin Chinese, Russian and Spanish.
To speak with one of our aerospace attorneys, please call for a consultation at +1 (206) 264-8999