There is a potential pot of gold in international recruitment markets but significant risks need to be managed to ensure you are rewarded for your investment !
This Blog follows on from my previous Blogs which set out the need to not only develop high performance recruitment and operational teams, but also ensure there is sufficient focus on managing the significant risks that will be faced.
This Blog focuses on the third "C", Corporate. Whilst probably the least interesting, get it wrong and government authorities could close down your business for non-compliance and breach of regulations.
As the graphic above shows, the key risks are associated with the following issues:
Entity Set-up - it is critical to have the correct legal, accountancy and tax advice to ensure the entity you use for doing business internationally - whether that be from a UK Company; a Branch or Company registered in the overseas location; or through a Professional Employer Organisation.
Shareholders - in some jurisdictions it is a requirement to have local nationals as shareholders to satisfy ‘Nationalisation’ legislation which can be tricky if they are required to have more than 50% ownership. A key question is how do you maintain control of your business and importantly, the cash in the bank account ?
Licences - again in some jurisdictions, you will be required to have a trade licence to do business and you need to ensure that it is the right one that enables you to legitimately provide recruitment services.
UBO - this stands for Ultimate Beneficial Ownership, and many clients and certainly banks and advisors will ask detailed questions about the ownership and control of each company in your corporate structure to satisfy their obligations under anti-money laundering legislation.
Sanctions - whilst sanctions legislation has always been complex, there has been an exponential increase in light of the international response to the Russia-Ukrainian war.
Trapped Cash - whilst there may be a pot of gold in international markets, if you are unable to repatriate cash from your international expansion back to the UK, then it becomes ‘trapped’ and effectively worthless in increasing shareholder value.
There are obviously other Corporate risks that need to be considered, some of which will be specific to where you are doing business and the manner in which you operate. It is essential to develop comprehensive risk mitigation plans to ensure your international growth continues to be successful. By effectively managing these risks, then you are on the right road to ensure success and “can put your head on your pillow at night and sleep easier”.
My mission as a Business Advisor is to champion best practice in risk and compliance for the professional recruitment sector, and extensive experience in international recruitment, enables SRC to help businesses consider and mitigate their risks, so they can enhance shareholder value through the adoption of best practice.
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