Preparing now by identifying and rectifying potential issues is important to your success in the coming year
As we come to the end of the compliance year, January can be a challenging time for leaders of global operations. These are six critical areas related to global operations compliance that you want to make sure you have well in hand because the financial, labor, and operational implications could be significant.
Global compliance: 6 questions to ask as you prepare for the new year
1. Are the established international business arrangements such as “payroll-only” registrations or third-party employment arrangements (international employer of record arrangements) still compliant, given changes to initial head counts?
For example, structures designed to accommodate one or two heads but are now dealing with larger employee populations may no longer be compliant or cost-effective. Ensuring an annual review of your international hiring structure is always recommended.
2. Have your customers or supply chains changed?
We often find that VAT and other indirect tax compliance obligations change over time as supply chains (to customers and from suppliers) evolve. This is particularly true when the customer base includes the public sector.
3. Are you ready and prepared for your year-end payroll, tax, accounting, and corporate filings?
More importantly, are your third-party providers ahead of the game and proactively on top of these filings on your behalf? Do you know when the deadlines are, and are your service providers proactively managing your expectations during the countdown period to the filing deadlines? We often hear horror stories of companies sending filings for review and signature within 24 hours of when the filing is due. Most importantly, are you fully up to speed with which providers are doing what for you in this regard, and do you have complete confidence that you are on top of their agenda?
4. Are you truly on top of your data privacy obligations in the different countries in which you operate and which you potentially may be operating during 2023?
In the coming year, the focus will remain on data privacy compliance, particularly in light of Meta (FaceBook) and Twitter, as well as the negative impacts (circulating in media) related to social media. Remember, trading in a location can still subject you to data regulations, even if you have no legal operations there. Most commonly, the contracting or RFP processes catch this, so not being ready to answer those critical questions can slow down the commercial sales process.
5. If you recently joined your organization and find you now have an international role, are you comfortable with what you have just inherited and the general compliance status of those operations?
Have you had the time to thoroughly examine the operational and employment practices in each of those countries to create a compliance heat map indicating where your focus may need to be turned in 2023?
We often hear that US-headquartered teams (be that finance, HR, tax, or legal) spend a disproportionate amount of their time managing the international aspects of their business, where typically, the headcount numbers are lower than the domestic teams.
6. A potential recession has put one thing in the minds of most executives: How do you preserve cash in foreign jurisdictions to fund operations?
Is your organization impacted and have plans been considered related to cost mitigation that may impact day-to-day operations such as headcount reductions? If so, are you comfortable with how to manage processes and the associated accrued costs that may already exist?
If matters related to global operations compliance are giving you any form of anxiety or you would like to chat about potential concerns, let us help you have a more relaxed upcoming holiday period.