Trade firm hampered by SARS outbreak

William Tao and Olivia Tearnan have even more reason than most to wish for a speedy resolution to the SARS crisis.

Their business is being hit hard by the illness.

Their company, Nevada Hospitality International Inc., was just beginning to make solid headway toward attracting Asian entrepreneurs to launch operations in northern Nevada when SARS began to spread.

Now they can only wait for the disease to run its course, allowing unhampered travel between Asian nations particularly China and the United States.

It's all the more frustrating, Tao said last week, because the founders of Nevada Hospitality International NHI for short are seeing indications that their approach to international trade works.

NHI works exactly counter to traditional trade-building programs in which groups of business and government leaders travel to distant lands to open markets for U.S.

products.

"Trade missions really do not work," said Tao, chairman of the NHI board.

"You never know whether the people you're dealing with have the authority to make things happen."

Instead, NHI works to entice Asian investors to open operations in Nevada bringing jobs and economic activity with them.

As NHI and its partners in China make their pitch, they often talk with companies that are looking for a beachhead in the United States, a place from which they can launch marketing efforts to American markets.

The NHI pitch is this: Nevada continues to be a place with a business-friendly tax structure.

At the same time, the existence of a special trade zone in northern Nevada allows foreign companies to import goods into the United States and prepare them for market at a savings in customs duty.

How does that work? Tao cites the examples of onions.

Imports of onions into the United States face a high tariff to protect domestic producers.

An Asian company could, however, ship containers of onions into the Port of Oakland, bring the unopened containers to the special trade zone and process the raw onions into onion powder.

No tariff would be levied on the unopened containers.

The tariff that would be levied on the onion powder produced in the special trade zone would be much lower than the tariff on raw onions.

There's an additional drawing card for foreign entrepreneurs: If they make substantial investments in the United States, they'll probably qualify to live here permanently.

NHI seeks to provide the know-how for Asian companies who want to open in northern Nevada helping them with everything from incorporation of American subsidiaries to development of relationships with investors and customers.

"We provide a knowledge conduit," Tao said.

A high-water mark for the two-yearold company came in December, when four Chinese companies signed articles of incorporation at the office of Secretary of State Dean Heller.

NHI expected to bring groups of Asian investors and entrepreneurs to Nevada every week or two, and had hosted three groups before SARS slowed travel.

The one bright spot is this: Because NHI markets knowledge and connections, its overhead is low.

It generates its revenues through a fee it charges to Asian investors, and the company has been profitable through much of its short life.