Stuart Weekes, Partner at national audit, tax, advisory and risk firm, Crowe in Reading looks at step for expanding into overseas markets
You are crossing a road but hesitate. On your left, hurtling towards you, is a juggernaut called Brexit and worries about potential recession. On your right is a freight train representing concerns about the threat of reduced customer orders and the costs of employing your people. What do you do? Do you cross that road?
Businesses face these decisions regularly. This is particularly true of those that are deciding whether to expand their operations and start to trade overseas. There will be pressures from all angles as a result of political decisions, trends in the economy or sometimes simply ‘wrong place, wrong time’. It is therefore important to plan, work out your unique selling point, persevere, and to act wisely taking regular counsel from those who have experience.
The Thames Valley is a vibrant community rife with growing businesses that have invested overseas as well as companies from outside of the UK that have invested in the Thames Valley. There are many reasons why such expansion is a smart decision; an increase in market penetration, increased brand awareness, access to foreign investors, reduce operating costs. But planning is key.
Clearly it will be important to understand any cultural differences, language barriers and political stability in the overseas country. However there are also a number of key practical areas that can be overlooked but should also be considered.
Set-up
Structure
Management and control
Funding
Profit repatriation
Tax rate and withholding taxes
Transfer pricing
Employee transfers and mobility
VAT and duty
On-going compliance
This is not an exhaustive list and such matters can be complex. It is important that business decisions are primarily driven by commercial factors rather than being led by tax objectives. However by taking the time to plan ahead, thinking through the issues involved, listening to your mentors and taking external professional advice, this should reduce the incidence of the juggernauts or at least help you to map out the crossing to reach the other side.
For more information or to discuss please contact Stuart Weekes stuart.weekes@crowe.cok
www.crowe.com/uk/croweuk/about-us/our-offices/thames-valley-office-information
Crowe U.K LLP
Aquis House
49-51 Blagrave Street
Reading, RG1 1PL, UK
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