4 Trends Driving the Need to Invest in Corporate Secretarial Services for Global Expansion

When you think about your upcoming M&A, chances are that “Corporate Secretarial Services” are not the first words that come to mind. And yet, perhaps they should be. Today’s blog highlights key trends that underscore the importance of Corporate Secretarial Services (commonly known as “CoSec”) in overseas acquisitions. We’ll also explore why they matter to your global expansion strategy.

What are Corporate Secretarial Services in the context of global expansion?

Let’s start with an overview of Corporate Secretarial Services – what they are and why they matter to companies expanding internationally.

Corporate Secretarial Services are a cornerstone for US companies expanding overseas. Think of them as a strategic asset that gives you an in-depth, holistic view into the complexities of your global expansion initiatives. Traditionally, they served a more administrative role focused on legal and corporate governance (e.g., compliance, corporate records, Board communication). Today’s Governance Officers (also known as Corporate or Board Secretaries outside of the US and Canada) have evolved to become strategic partners who sit at the nexus of a company’s global expansion strategy.

These days, Governance Officers ensure that companies comply with the unique legal and regulatory frameworks of each country and jurisdiction in which they have a presence. Because these requirements (which can range from local laws and regulations to tax codes and employment laws) are exceedingly complex and vary from one jurisdiction to another, Corporate Secretarial Services provide a uniquely holistic overview across the spectrum of a company’s responsibilities when navigating the complexity of overseas M&As or acquisitions.

Which four global trends are driving the need for Corporate Secretarial Services in 2024?

1. M&As are on the rise. 

For starters, the pandemic “pause” in new markets and global expansion is over. Board agendas now regularly include discussions on financing and growth, reflecting a desire to expand and a renewed interest in emerging markets and opportunities. Unsurprisingly, this renewed appetite for growth is resulting in a steady increase in the number of global Merger and Acquisition deals, which is driving a commensurate rise in the number of entity incorporations and corporate restructuring and simplification projects we’re seeing.

2. The regulatory landscape is getting more complex and stringent—especially for foreign companies. 

If you’re wondering how this acceleration in global expansion is playing out everywhere, from emerging markets to the US and the EU, I can answer that in one word: regulations. For emerging markets, in particular, there is the double whammy of more stringent requirements alongside explicit guidelines—many of which are specifically aimed at foreign businesses. As a result, regulations, entity reporting, and governance are on the rise.

3. Remote work is complicating hiring, payroll, and benefits. 

As we all know, the post-pandemic landscape has also resulted in tremendous growth in remote work. This change has affected obvious areas like reduced cost outlays for office space and means that businesses may seek to hire in new or non-traditional locations. That may be driving the trend of new company registrations and the resulting more complicated payroll and benefit considerations.

4. The role of Corporate Secretarial Services is evolving alongside global trends. 

Another trend we’re observing is a stronger focus on optimizing legal and Corporate Secretarial Services functions—separating key roles and defining core responsibilities within the legal, compliance, governance, and risk business areas. A key reason for this stems from the growing pressure being put on Governance officers and their teams—pressure that goes beyond executive management teams and extends to the Board, investors, and shareholders. This is partly due to stricter reporting regulations and requirements, which require a more rigorous emphasis on data management, corporate communication, and meeting deadlines. Stakeholders understand that, without the proper controls in place, the penalties for no compliance can be quite severe (ranging from company strike-off to personal liability for company Directors or financial penalties). That’s also why we’re seeing more companies looking to outsource compliance, particularly as regulation increases alongside disclosure volumes, filing requirements, and internal reporting.

One thing that isn’t changing – cost pressures. 

Cost and efficiency drivers, as well as their associated budget constraints, continue to remain a key factor for all companies across all sectors. If you’re a growth-oriented company poised for global expansion, it’s a sure bet that you will continue to find the “right” balance of how to meet demand and compliance requirements while minimizing spend. Those cost pressures, along with the rapid pace of change in the global expansion landscape, all point to the pivotal role that Corporate Secretarial Services can play in the success of a company’s global expansion strategy.

While many service providers bring large-scale, standardized solutions to global expansion challenges, an expert with a tailored approach and real-world expertise will always deliver the right results for your company. Our clients frequently tell us how much they appreciate that HSP has become an essential extension of their internal teams.

The HSP high-touch, hands-on approach sets us apart and is a cornerstone of our personalized, bespoke solutions. Contact us today so that we can start delivering your custom solutions.

Relevant Blogs

Have Questions? Click Here to Get Them Answered!