Читать книгу Professional Practice for Interior Designers - Christine M. Piotrowski - Страница 62

When a firm designs a project in the United States, they expect that the client will pay its bills in U.S. dollars. Some firms even make this a provision in their contracts for clarity. When doing an international project, that country may choose to pay in their currency. An easy concept to understand on this problem is that the rate of exchange between the U.S. dollar and the foreign currency fluctuates daily. The rate of exchange is a measure of one currency against another as they relate to values. In addition, the exchange rate can be significant depending on what might be happening in this country versus the country you are trying to do business.

An important point in negotiation is thus which currency will be used related to fees and payment. That is something that should be spelled out in the design contract. Naturally a U.S. design firm will want fees and payment to be based on the U.S. dollar, as that is familiar to the firm. Any economic issue—or crisis—that impacts the value of the dollar can result in a major loss for the design firm.

One solution suggested by many experts is to obtain a letter of credit from the client. In this case, a bank investigates the buyer (client) to determine credit worthiness and confirms such to the seller (designer). In international business transactions it is further recommended that the seller obtain an irrevocable letter of credit from the client. “An irrevocable letter of credit cannot be amended or canceled without the agreement of all parties…”² This provides further protection to the designer that the foreign client will pay the bill.

The financial health of the client is another point of research. Similar to trying to judge a domestic client, the design firm would like to be made aware of the financial standing of the firm/client. This is not as easy in the international arena as would be in the United States. The design firm could engage a U.S. bank with foreign connections to investigate the client. The U.S. Department of Commerce (www.commerce.gov) can also be contacted to obtain assistance. Dun and Bradstreet (www.dbn.com) can also be contacted for credit information on commercial international clients. Note that Dun and Bradstreet is also discussed in Chapter 20.

A final issue in this brief discussion (though in no way does this discussion constitute the complete range of issues) is taxes. The tax regulations on international monies leaving a country will vary and can be significant. Some countries have very strict legal restraints on how much money can be paid out to any other foreign country. The design firm is likely to also have to pay taxes on the monies it earns in the foreign country to that government. Obviously, this impacts the potential profitability of doing a design project in some international countries.

Monies earned out of the United States are also subject to taxes to the U.S. Internal Revenue Service on the firm's income tax reporting forms. This is also true of an individual designer who might do a project out of the United States that earns payments from out of the country. That income will be taxable in the United States.