The landscape for today’s globally expanding companies is in a state of constant change. As we wrote in a previous blog, that makes entity management a critical component of a successful, competitive global company with plans for more growth. We’ve also written many articles on how companies can take their first steps into global expansion, either through an EOR provider or by setting up a legal entity. Today’s blog, however, takes you past that initial “start-up” phase and delves deeper into what entity management looks like in the long term. We’ll walk you through three brief examples of how different companies made the decision to work with us, the challenges they faced, and how they fared.
What is Entity Management?
Entity management is the process of overseeing and maintaining compliance, governance, and operational structures for a globally expanding company’s legal entities across multiple countries. One of the most critical functions of entity management is ensuring that companies remain in compliance with local laws and regulations. In addition, effective entity management helps businesses streamline processes, mitigate risks, and ensure continuity.
A large multinational company engages in a complex M&A across several continents
In one instance, a large multinational company (headquartered in the US) was going through an international acquisition that involved several European and Asian countries (specifically, the acquisition of 18 entities in 15 countries). HSP was brought in during the M&A process of incorporating the various new entities. The company faced many significant challenges, the most notable of which was the lack of local knowledge about the new territories into which they were entering. This challenge, combined with tight timeframes, lack of resources, and hiring constraints added to the complexity of the M&A transaction.
To solve for this, we were able to offer a solution in which we not only provided an expert project management team to work alongside the transactional team, but also provided a short-term secondment to work more closely and integrate with the customer’s team. We acted as the coordinator between buyer and seller, as well as between all law firms, accountants, consultants and in-house teams—all with the goal of providing the client one point of contact and full project oversight for a complex M&A transaction.
We were able to quickly map the current state with the new, identify gaps, undertake entity health checks to assist with due diligence requirements, review corporate documents across all entities and countries, work with teams on developing a realistic transfer date, and assist with the incorporation of the local entities. We also handled the post-incorporation requirements and opened all bank accounts. One of our most critical roles was to brief the client on their ongoing obligations and compliance and legal requirements per country as well as all accounting and payroll requirements per jurisdiction.
Additionally, we worked alongside the HR Consulting team on employee transfer support, employee onboarding, recontracting, benefits analysis, and internal policy development or creation, ensuring the entity is operationally ready before the TSA deadline date.
Our expertise was key to helping the client identify and resolve issues of which they were unaware. For example, during the entity registration process, we discovered that the client’s multiple vendors (ranging from an international corporate law firm to a local consulting company) were not coordinating well with one another. One vendor would finish their part of the process and not communicate to the other vendor that additional work could commence. This was creating significant gaps in the timeline because important work was not being performed among the various vendors.
Because our experts span the entire spectrum of global expansion services, we were able to identify these gaps and quickly add consulting solutions. In this particular case we provided detailed project plans aligned to in-country experience to refocus and ensure all teams were realistic on the expectations. For one country in particular, we even flagged where the documentation provided in a scanned copy would not be sufficient for the process in that country (despite being told otherwise from their lawyers). Thus, we were able to handle the coordination of document legalisation at the last minute and avoid delays.
We also provided Director training, outlining the responsibilities and personal liabilities in some of the countries in which the company had not previously operated. Our HR consulting team were also able to assist with the global mobility aspects of people movement and assist with the communication to employees to works councils and unions. In our experience, we have seen that this important responsibility is often left to HR teams who lack critical local knowledge on specific HR laws and the applicability of these laws. This delegation can make it difficult to complete these tasks accurately and successfully before the deadline.
The fact that we were able to quickly bring in tailored expert support beyond the original scope of registering legal entities demonstrates that complex M&As often surface unexpected challenges and require quick resolution. It also shows how having a single point of contact for these issues (versus working across multiple providers in different countries) can help create an efficient and streamlined process for even the most complex M&As.
A globally expanding company outgrows its multiple service providers
In another instance, we were brought in to support a small company with entities in two countries that had been working with an entity management provider for a few years. However, when this company decided to conduct a second wave of expansion, they found that their provider lacked the in-country experts in those new countries. In addition, the company was beginning to struggle with its own management of various providers. For example, they had one provider in the US to handle legal issues while another managed their entities. The company routinely had to contact two different providers (one in each country), which caused burdensome coordination of different time zones and languages.
We were brought in to provide holistic support across all of the companies existing (and future) entities, under a new, single point of contact. With only one provider managing all entities, markets and corporate documents, the company was able to conduct its operations more efficiently and benefit from the greater oversight that working with our experts provided.
New market entry for a growing start-up
A quickly growing start-up was preparing to enter a new market overseas, they realized that they lacked an in-country expert who both understood the market opportunities and had a local presence in the target country. This is a good example of a situation that we often see with our clients—a client engages us for support after they have tried to engage with a local provider and face various obstacles, from finding the process unclear, dealing with language or timezone constraints, or realizing that they need a partner who is more familiar with global expansion and entering new markets.
For this particular company, we used a mix of services to offer a more complete and comprehensive offering. For example, we kicked off the project with a strategy workshop to help us understand their business model, their opportunities in entering a new market, and their intended activities. From this we were able to outline the best options to suit their needs.
From there we created a market entry report including tax, compliance and employment matters and the regulatory and legal considerations they were facing. We supported them with the incorporation process, and operationalised their entity post-incorporation, working with them to ensure that their entity remained in compliance and in good standing through the provision of our legal entity management services.
Thus, the company did not need to hire someone locally to manage the compliance and were able to rely on us as the one point of contact to manage the local complexities on their behalf.
Our large global footprint and team of experts in almost every country allowed us to quickly step in. We ensured that the new entity was operating in compliance with local requirements, creating all the necessary corporate documentation. Our agile, tailored approach allowed the start-up to seamlessly enter into a new market without the complexity and risk associated with lack of resources, capacity and expertise.
Streamline entity management with a single tailored, flexible solution
Effective entity management is more than just an administrative function—it’s a strategic approach to managing growth, ensuring compliance, and creating a positive, unified culture across your global operations. Partnering with a single trusted expert specializing in all aspects of global entity management brings you peace of mind, flexibility, and ensures that your provider grows with your company’s needs—whenever and wherever your growth strategy takes you.
Partner with HSP
HSP is an end-to-end global expansion solutions provider focused on helping companies scale their operations overseas effectively and efficiently. We are the only global expansion expert to offer growing companies a full suite of end-to-end solutions designed to help them scale to any size and country.
Our in-country experts have delivered the full spectrum of global expansion solutions—from EoR to entity set-up and management—across more than 100 countries (and counting). HSP brings full payroll, accounting, tax, legal, compliance, and HR services to corporate teams, integrating with in-house staff to both guide and execute across every domain.
Contact us to discover how our entity management services can ensure compliance and streamline your operations with our team of experts.
