As businesses expand their operations, their legal and regulatory obligations increase apace. Matters become even more complex when that expansion takes a company into a new territory.
Maintaining compliance in such circumstances can be a minefield, but it’s by no means impossible. Here are some of the key ways businesses can keep on top of the situation.
Understand the complex regulations
First things first, it’s important to understand the laws in the country being expanded into. This will typically be researched well ahead of time, as it’s a key principle in ensuring a viable new territory is selected.
Some businesses may look to strengthen their legal and financial departments in preparation, finding talent with knowledge and experience in the new area they will be operating in. This can provide them with a better understanding of the laws of the new jurisdiction.
Engage with international legal and tax professionals
Alternatively, they may look externally for help and get support from a law firm that boasts tax professionals with deep international expertise. This avoids the need to go through a hiring process for jobs that may not be necessary in the long run. Furthermore, the law firm will likely have helped other businesses through the same process, so will know the potential pitfalls to avoid.
Major law firms have offices dotted all over the globe, making it easier to find one with knowledge of the legal and tax frameworks of the areas a company intends to start operating in.
Implement tax planning strategies
Whichever way insight into a business’ obligations is gleaned, the next step is to implement tax planning strategies.
This approach sees companies optimise the way they meet their tax obligations, doing what they need to in order to remain compliant and avoid any fines or other ramifications for falling foul of the system.
For example, operating across multiple jurisdictions could lead to double taxation, which is when a source of income is taxed by more than one country. Tax planning helps avoid this.
Use technology and automation
Tax professionals can spend a lot of time doing research, entering data, and completing many other manual tasks that could be automated. Finding areas where this is possible leaves tax employees free to focus on doing more strategic work that can add value to the businesses.
Recent strides in the field of artificial intelligence (AI) mean that automating tasks is becoming even easier, with machine-learning systems often able to complete huge amounts of work in a fraction of the time it would take a human.
Keeping abreast of trends in this area helps firms make the most of their human capital.
