Startups and other early-stage companies may have world-changing ideas, but they often need help with the day-to-day aspects of running a growing business, from incorporating an entity to registering a payroll to fulfilling reporting and other compliance obligations. Many startup founders don’t know the full extent of their obligations, and may not have the time and inclination for getting and staying compliant. Those are just domestic concerns. These days, startups are expanding internationally much earlier in their lifecycles, sometimes from day one. Unfortunately, the challenges of expanding and operating abroad can be quite different domestic considerations. Failing to understand and comply with the laws of target countries can be every bit as damaging to a company’s bottom line and reputation as falling afoul of domestic legislation.
The OECD and IMF have reported recently that global economic momentum has faltered and is likely to remain slow. Inhibiting factors include trade tensions, corporate and government debt, disruptive technologies and more. Corporate leaders are well aware of the trend. As one Harvard Business Review article puts it, “Many C-suite executives are already anticipating recession in the next few years and quietly gearing up for it.”
As a multinational business expands it becomes more complex and difficult to manage. Whether your organization has grown organically and/or through acquisition, just keeping track of your legal entities can become challenging, to say nothing of understanding why they were established and if you still need them. Just as important is understanding and fulfilling your compliance obligations in all your countries of operation. Each entity will have its own set of local corporate filing deadlines, director requirements, bank account considerations and more. Even if you eventually get control over these obligations, one or more of your countries of operation will change an existing regulation or add a new one, leaving you scrambling to comply.
Brexit will have profound effects on businesses exporting from the UK and those with UK-based customers, regardless of where those businesses are located. Affected businesses will face new challenges related to data protection, supply chains, immigration and more. The precise nature of many of these challenges remains uncertain, and the hard truth is that many Brexit-related uncertainties will persist long after the UK leaves the EU.