Too much information … information … information

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Image courtesy of LWL-Klinik Lengerich

One of the questions I’m asked all of the time is one which no one on this side of the Atlantic Ocean would ever expect, and that is, what are the legal requirements for business letterhead in the US? The answer is, there are none, usually accompanied by a vaguely perplexed look. That’s not entirely true, as I’ll discuss below, but it’s pretty darn close. But first, why the question in the first place?

Perhaps unsurprisingly, Germany does regulate the content of letterhead, as do most European countries to one extent or another. Although the requirements differ for different types of corporations, German letterhead (Briefbogen) typically includes the company name and address, the court at which the company is registered, the company’s number in the corporate registry (Handelsregisternummer), and the managing directors or officers of the corporation. Germans also typically include their complete banking information, including the IBAN or similar bank number and account.

In the US, in contrast, letterhead is typically limited to the company name, address, phone numbers, and website address. personalized letterhead may also include an e-mail address or other contact information, and occasionally letterhead will include a slogan or information about the company’s productions. That’s typically it – no additional information is required or expected. In fact, you can leave most of that information off if you really want, although it may not make as professional an impression.

While not a requirement under the law, it is advisable for companies to include their full legal names somewhere on the letterhead, including “Inc.” or “LLC” or whatever, to clearly indicate to the recipient of any correspondence that they are dealing with a limited liability business entity. Certain industries include additional information by custom (e.g., law firms include the names of partners in the partnership), but that’s not a legal requirement.

It’s also important that the letterhead not be deceptive – while you don’t have to include any particular information on your letterhead, the information you choose to include should be accurate and clear.

So, to be clear, you do not need your EIN (tax number), directors, officers, or bank information on your US letterhead. In fact we recommend against it, because that’s just information that scammers can use to try and social engineer their way into your company bank account.

For more information about German letterhead requirements, see this summary from the Hamburg Chamber of Commerce (in German) or shoot us an e-mail.

Germany’s DeNIC offers (a bit) more privacy for some registrants

Whois screengrab

With the increasing focus on privacy in Europe, and ongoing challenges to the US-European “Privacy Shield” agreement, domain name registrants from Europe see domain names as (yet another) weak link in privacy rights. They wouldn’t be wrong in that – in order to protect domain name registrants in the case of the failure of a domain name registrar, all registrars are required to put the underlying registrant data in escrow with an accredited data escrow provider. Until recently, however, the only ICANN-approved data escrow provider has been the US company Iron Mountain, and as a result all of the agreements (and the underlying data) were subject to US law. That, of course, means they were subject to US law enforcement and civil litigation demands as well.

That has recently changed. According to heise online (in German), DeNIC, the German company in charge of the .de country level domain, has recently been accredited by ICANN as a third party data escrow provider for registrar data. DeNIC’s accreditation provides a European alternative to Iron Mountain, and provides some assurances that European data remains in Europe subject to European privacy laws. While that’s an improvement, domain registries must also escrow data, and there’s only a single provider for those services as well (can you guess who that might be?). DeNIC, looking to close that weak link in data protection, is actively seeking accreditation there as well.

While this particular service may not impact US business to any great extent, it does demonstrate an increasing interest in European alternatives under the current political climate. No doubt companies like XING (a German LinkedIn alternative) and UK online bookseller Wordery will seek to capitalize on increasing European concern over US service providers.

At the rate things are going, US disregard for privacy may create the European Internet champions that European lawmakers could not.

For more on DeNIC’s accreditation and continuing efforts, see this press release.

How will the new H-1B rules impact German companies?

Zeit Online recently ran an article about announcement by the Trump administration that H-1B visas will be more closely screened than before, and that the focus on protecting US workers will increase. While these changes will (eventually) impact some companies, particularly in the tech area, many German investors will be impacted only indirectly by changes to the H-1B program.

Most small to mid-sized German companies (the so-called Mittelstand) look to two other options for their personnel needs in the USA – the L visa and the E-visa. Neither visa has a separate mechanism to protect US workers because of their limited scope and purpose, and because other limitations (such as specific qualifications or business requirements) limit their use. Neither visa has been subject to the same level of alleged abuse as the H-1B visa (although the L visa has suffered some collateral damage), and thus far neither program has been subject to the same level of animosity from the Trump administration.

The L-visa allows current or recent employees of a German company to be transferred to a US subsidiary or affiliate if they meet certain qualifications. Since the visa is for the transfer of an existing employee, and is to further the exchange of knowledge between related companies, typically only a relatively small number of people can qualify. As a result, there should be little threat to US workers on a larger scale, who wouldn’t have the knowledge necessary for the position anyway since it is specific to the transferring company.

The E-visa allows German companies who trade extensively with the US (E-1) or invest in the United States (E-2) to hire a German national in the US to oversee that trade or investment. The idea is that the investment or trade would not happen without the assistance of someone whom the investor trusts, or someone who has at least the same cultural background as the investor/trader. Since the program is limited to nationals of a specific country with specific qualifications, the overall risk posed by the program to US workers is also limited.

This is not to say that the kerfuffle over H-1B visas doesn’t impact German companies at all. First of all, when H-1B visas become difficult to obtain the strain on other visa categories becomes much greater. The L-1B visa for non-managerial workers in particular has been utilized by companies who can’t obtain enough H-1B visas, often in ways which weren’t really intended uses for the visa. As L-1Bs become more difficult to get, more employers seek to obtain the more preferable L-1A (for managers), which increases scrutiny of that category as well. Not surprisingly, all of the extra scrutiny in the L category makes the E-visa a more attractive option for German companies which, in turn, makes those more difficult to obtain.

Of course, German companies who have already managed to establish a subsidiary in the US (especially in the IT industry) often find that their help wanted ads are answered by foreign nationals, who in turn require a visa (often an H-1B) for employment. As one of my clients once mentioned to me, the German headquarters was not at all happy about having established a US entity at great effort and cost, for the purpose of having an “American” presence, only to turn around and hire Indian nationals and spend money on additional visa applications.

Overall, German companies with a solid business plan and a real need can still obtain the visas they need, although with a little more effort and scrutiny. So far, most (but not all) of those German nationals can still enter the US without too much trouble, although sometimes with more scrutiny and effort there as well. The bigger question for the US is whether the constant barrage of bad news and border control horror stories will make Germans reconsider investing in the US at all.

Blocking the ad blockers

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Munich (but not the appellate court)

Advertisers don’t much like adblockers, and publishers in particular see them as a drain on revenue necessary for the production of content.

One of the most popular ad-blocking plugins is the not-so-cleverly-named Adblock, by the more cleverly named German company Eyeo GmbH, based in Cologne. According to a recent report by German IT news portal heise online, a recent attempt by three German media outfits to take Adblock offline has met with skepticism by Munich’s appellate court. The plaintiffs (which include my “other” hometown newspaper, the Süddeutsche Zeitung, threw everything they could at Eyeo, from copyright infringement to antitrust, but the court doesn’t seem to have bought into it. At issue, among other things, is the “whitelisting” process which allows Eyeo to make money on blocked ads.

This decision may vindicate Eyeo’s partial loss against Axel Springer, and follows a win in Hamburg against Spiegel Online. Either way, it looks as though efforts to block the adblocker will make their way to Germany’s Supreme Court in Karlsruhe sometime next year. Having failed in the courts before, however, German media isn’t putting all of their eggs in one basket. In addition to technical measures, the industry group for German newspapers is also pursuing the legislative route to see off Adblock.

Efforts to block Eyeo in France also seem to have faded, and in the US there has been little in the way of legal action against ad blocking software, probably due to different antitrust and competition laws. Thus far Eyeo has won more of these battles than it has lost, so adblocking will remain a thorn in advertisers’ sides for some time to come.