Читать книгу Startup CXO - Matt Blumberg - Страница 31

When an organization is ready to expand globally, they may be trying to expand its sales footprint, create more product development capacity, or find manufacturing capabilities. If you decide to expand internationally, there are a number of important things to do right at the onset.

 Local partners. Find a local partner that can help you navigate the country compliance, filings, tax, pensions, accounting, etc. If you go the Professional Employment Organization (PEO) route, where you use a third party to co‐employ your employees, and provide benefits and payroll, a lot of these issues will be taken care of for you in one place. This is usually cost‐effective until you get to more than a handful of people. Once you expand operations beyond that handful of people, you'll want to make sure you have partners for accounting, audit, payroll, compliance, and legal. For audit, if you are using a large audit firm with a global presence, you can often use their local office as the audit firm. But it is typically treated as a separate agreement between you and the audit firm and it is almost certainly going to be more expensive than going with a small local firm. Although there are some efficiencies in partnering with a big audit firm, the choice of firm typically comes down to a tradeoff between the extra money you'll pay and the number of efficiencies you'll get.

 Corporate organization. Creating a corporate entity in a new region creates all sorts of complexities. This is an area where you definitely need to have guidance from your primary corporate counsel on your overall corporate structure and you will want local guidance in setting up the entity in that country. You will also need to have an idea on how to recognize revenue and treat intellectual property (IP), because these two areas can differ from region to region. You will want to have solid documentation that can show how cash flow moves across entities and how the transfer pricing agreements treat intra‐company loans, dividends, use of IP, etc.

 Intercompany documentation. Other than the official corporate documents, the most important item to have ironed out early on is the company's transfer pricing agreements. Roughly, this agreement will detail how the different corporate entities transact with each other in terms of products, IP, and people. You will definitely want to work with counsel in order to put this together but here are a few things to keep in mind.If you have more than one transfer agreement across multiple organizations, you will want to have a consistent approach in maintaining these agreements.You will want to clearly state legal ownership of any pre‐existing IP and how to handle the creation of new IP.Often employees may travel to or spend significant time at the office of the foreign entity and the transfer agreement should have clarity on how this is treated.Ultimately the transfer pricing agreements are important documents for the different global tax authorities, so keep this in mind as you scale.Transfer pricing agreements will be required in any due diligence process so make sure they stay current and have a clear renewal process so that they are always active.

 Revenue attribution. If you end up creating a new entity and have to produce financials, you will need to determine how you are going to treat revenue. This is obviously a complicated problem, and you'll have to work with an experienced advisor. Your options will be different by country, but at a high level, the two common approaches for technology startups are cost‐plus‐percent method or a directly invoiced method. With the cost‐plus‐percent approach, you are simply taking all the costs you are recognizing for the entity and then having revenue be some percent higher. So, if you were cost‐plus 6%, you would have a 6% profit and you would pay the corporate tax to the local tax authority on that 6%. The benefit of this approach is that it is very simple and allows you to continue to bill your customers out of the entity in the United States. But you cannot do this in all countries and it may not be optimizing your tax situation. Another common approach is to simply bill the clients sold and serviced in that country directly from that entity. This means you will need to build invoicing and collection functionality and follow the revenue recognition rules by country.

 Cash management. Companies will need to fund international operations by sending money to those entities to cover payroll and other expenses, assuming that the new entity is not billing and collecting itself. It's important to consider timing and how much cash to leave in the foreign bank accounts. And depending on how you are doing revenue recognition and customer billing, you may also have to build in sophisticated transfer pricing agreements and corporate business unit dividends in order to optimize your cash.