Corporate inversion, the practice of reincorporating an American business in a different country by merging with a smaller overseas entity, often to take advantage of lower tax rates, was in the US Government's spotlight in 2014. In September, the US Treasury Department issued new rules that effectively eliminate the practice. In an article published by Corporate Compliance Insights, Katie Davies, Senior Director, Advisory Services at Radius, sheds some light on what happens now for the companies and their executives who rushed to beat the Treasury Department's deadline.
“Don’t assume things work like in the U.S. and don’t take anything for granted.” - Larry Harding
That clear-eyed bit of advice came from a CEO at a consumer goods company, in response to a survey we conducted on the topic of global expansion. The survey, done in partnership with CFO Research, asked senior executives at small- and mid-sized businesses about the opportunities and challenges of opening overseas offices. Nearly 90% of the respondents were already operating overseas (the rest were considering expansion), and nearly two-thirds (65%) expected to be increasing their global footprint within a year of taking the survey.
After conquering Europe and making significant headway in Asia and some parts of the Middle East like Dubai, many business schools from the United States and Europe are now exploring a bold new frontier: Africa.
For high growth companies (start-ups) in today’s most competitive sectors, building an international business is no longer optional. If you’re planning on building a business only within the confines of your country and relying on the strengths of the domestic markets, you will leave market share on the table.
Though there are places in the world people can be fired without warning, it tends to be the exception rather than the rule.