When taking your business from the United States and expanding it into the international arena, there are a number of things to consider. None of which are more important than the financial state of your company. Working with an international accounting professional can help resolve some of the issues associated with an international expansion of this nature.
One must test your financial model and the revenue targets to ensure that you can expand while simultaneously servicing your debt. An international accounting professional will work with you to include hypothetical parameters such as an interest rate hike, current deflation or difficult market conditions. Despite the fact that the world underwent a major financial crisis in 2008/09, many international businesses continued to achieve growth due to the establishment and implementation of realistic and effective financial models that had been stress tested.
With an international accounting professional, there are many different ways to raise the capital needed for global expansion. There are traditional means such as bank or intercompany loans however there are alternatives as well. It’s important to work hand-in-hand with your international accounting professional at your side to determine how much and from where.
Once you have secured financing, from there on out it becomes about managing finances amongst the United States and your target country. Test your assumptions by determining if you can achieve the desired debt to equity ratio recommended by your international accounting firm and any additional financial advisors you may be working with. Confirm that your treasury function is permitted under local and US law to ensure that the terms of your financial agreement doesn’t breach the transfer pricing rules or thin capitalization thresholds.
This is really the nuts and bolts of what it is to receive and maintain financing. Contact an international accounting professional that you trust to be able to set yourself up for expansion into emerging markets.
No longer does a multinational company need to be a corporate giant like General Electric or Wal-Mart. You don’t need billions in annual revenue, hundreds of employees, and multiple offices domestically to expand. Many small and mid-sized companies are venturing abroad and not necessarily for sales. We’re not talking about strictly selling your product internationally. International expansion could mean searching out a leading edge technology at a lower cost or to find labour for a lower wage than what is offered in advanced economies in North America and Europe. Anytime your business crosses a border, significant financial risk is posed but an international accounting professional can help.
What an international accounting professional can bring to the table is their expertise in being able to navigate financially through different markets. You want a partner when confronting new tax laws, repatriation of cash, intellectual property theft, currency fluctuations, labor law and regulatory issues, etc. In order to be able to succeed on a multinational level, an international accounting professional is mandatory. There’s too much at stake and far too much to lose if you’re not careful. You don’t want to be caught with an unexpected tax bill when you needed it the least. Errors like these shut down businesses and whether it’s temporary or permanent, a shutdown of any kind could result in you losing your part in the market.
Locate an international accounting professional today to begin setting yourself up for international expansion.
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