Going Global Without Going Nuts

Going Global Without Going Nuts

Agenda:

Pre-Implementation Phase• Gathering the necessary information from subsidiaries to

determine the most efficient cash management structure• Ensure global entities banking needs are met

Implementation Phase• Understand the task at hand including internal resources needed

to make a global change• Gather the necessary information and documentation to make a

global banking change

Post Implementation Phase – Go Live• Things you should know• How to process transactions globally

About Alliance Data Systems Corporation is a leading provider of

market-driven credit solutions and a leading power of multi-channel, data driven technologies, marketing services and Loyalty programs

– 4 Divisions• Alliance Data - Retail• Epsilon• LoyaltyOne • Aspen Marketing Services

– Over 8,500 employees Worldwide in over 50 offices• Canada, London, Ireland, France, Germany, Hong Kong,

Singapore, Australia, China, Japan, India, Brazil, USA

So your Going Global

• Congratulations!– Expanded Market share/Growth into a new line of

business– Opportunity to learn about different cultures and talk with

people around the world. – Increase the value to your company and to your own

personal growth– Gain a better insight into how business is done around the

world

So your Going Global• Sorry to Hear!

– It will take longer than you expect to open accounts and do business around the world

– You could be seen as a stumbling block when the process does not go as fast as everyone wants it to

– Every country is different in their policies and procedures. Even in the European Union

– Trying to determine what is needed and how to get it done will take you a longer than expected

• Will you have existing employees• Will you be a new company to the market or a partnership

Stated Corporate

InitiativeCommunication

Team

the

Proj

ect

Senior Managem

ent Support

Comprehensive Project Plan

Pre-Implemenation Phase – Essential Factors for a Successful Project

Stated Company ObjectiveClearly defined corporate objectives that outlines benefits to entire organizationAssemble the

TeamEnsure appropriate representation from the entities as well as IT resources

CFO SupportEssential for a success projet to have the support of the CFO

Comprehensive Project PlanEnsure all the needs of each subsidiary is met and the corporate goals are clearly articulated

CommunicationClearly articulate the corporate benefit and communicate often to each party

Things to Consider:• Payables/Receivables: How are they processed?

• Mix of electronic versus paper?• What manual processes are involved?

• What effeciences can be brought to the processes?• How is payroll processed (third party or in-house? What

are the local petty cash requirements?• Are there any direct connections to the bank today for

processing (information reporting, payables process, reconcilation files)?

• Are their any local lines of credit or overdraft facilities in place? – what is their usage and cost?

• What Trade needs does each entity have? What bank guarantees/letters of credit are outstanding

• How are these financed locally? Cash collateral?• Do the local banks issue credit cards to the local entities?

Pre-Implementation Phase – Gathering the necessary informationEnsure you understand each country’s/subsidiaries banking practices today – and their needs going forward.

Pre-Implementation – Analyzing the Data

Expense reduction

Increase in use of excess cash (self funding or increase in returns)

Visibility of cash balances world wideControl /Audit /Fraud

Reducing counterparty / sovereign risk Building a

Business Case

• Establish realistic goals and roadmap for implementation• Phased approach or big bang

change• Select phases carefully

understanding other intiatives affecting each subsidiary

Strategy

• Develop project plan in conjunction with all areas affected• Treasury/Finance/Accounting –

Corporate and abroad• External Providers (banking

partner, treasury workstation)• IT resources

Planning

• Hold initial kick off meeting with the team• Roles and responsibilities of

each member• Implementation approach• Timeline for completion

Implementation

• Constent communication to ensure all parties understand delieverables

• Weekly meetings to ensure project is progressing with all parties involved

• Communication from Senior Management of the priority of the project

Communication

Implementation Phase: Establishing a foundation for a successful Implementation

Determining the Team

• Make sure there is a clear expectation of what is to be accomplished by expanding Internationally

• What experiences does each Team Member have about expanding internationally?

• Decide if a consultant would be a wise investment– By Region/Country

• Start a Project Plan, set the dates, then add 3 months• Make sure to keep upper management informed of

the issues

Determining the Team – Who/What you will need

• Official Letterhead• Legal• Tax• Human Resources• Business Development• In-country employees or contractors• Google• Signers – local/non-local• All electronic/checks

All Hands on the Globe – Legal & Tax

• Legal & Tax - how is the company formed• Has the entity been set up

– Tax ID – must have to set up a bank account/entity – Articles of Incorporation/Articles of Association– Banking Resolution – be generic, but inclusive

» No names – titles only – make sure the titles on the Banking Resolution match what the person is titled

• How will the new company fit into your current structure?

• Will a Holding Company be formed?» Prepare an Org Chart» Tax implications of structure

All Hands on the Globe – Legal & Tax

• Who are the Directors/Officers of the new company?– Local, in the US, other countries

• Any signing authority• What Accounting Firm/Law Firm is Representing you?

– Do you have a clause for bad advice or missed information?

• Are forms to be on a specific weight of paper• What is a “true copy”• What color of ink

All Hands on the Globe- Tax & Legal – continued

• What taxes need to be paid (corporate, payroll, local, property, VAT, etc.)?

• WHEN do they need to be paid and HOW? • Domestic banks only?

All Hands on the Globe - HR

• Employees, Payroll and Benefits– What pensions and insurance are you going to offer and

can you?• What are you required to pay & when

– Are you going to use a Payroll company• Which ones are allowed in that country• What services can they offer

– How do you handle terminations (voluntary or forced)• What are you responsible to provide – severance• What laws do you have to comply with

– Rights of Information

All Hands on the Globe – HR cont.

• Employees, Payroll and Benefits– Are you assuming employees, hiring (contractors or

employees), benefits, signing bonuses – are they allowed?– Are you going to pay in local currency or USD– When is pay date going to be (bi-weekly, monthly)

• What is common in that country– How are you going to pay your employees/contractors

All Hands on the Globe - AP

• Accounts Payable – How are you going to pay your expenses?

• USD payments will not make local vendors happy– Can your current AP system handle multi-currencies?

• Will you process manually or with your ERP or finance system?– What are the requirements to pay vendors?– Where are how will invoices get to you to be paid and how

will they get to Treasury to pay?– Corporate Cards, Purchasing Card, Checks, Wires, EFTs

(ACH like) – what will you use?• What currencies – USD based or local currencies

All Hands on the Globe - AR

• Accounts Receivable– Can you bill in different currencies?

• USD billing will not make local companies happy– What will be your invoicing structure per country,

region or industry be?– Who is going to be responsible for the currency

exchange• How will the invoices appear on your bank’s online

system or bank statements?

All Hands on the Globe – GL & Accounting

• General Ledger and Accounting– Who will determine and set up the new company

and entities into your ledger system?– How will expenses and revenue be recorded?– Who is responsible for reconciling?– Where and Who gets the bank statements?– Inter-Company Loans/Transfers

• YIKES –Allow?– Audits

All Hands on the Globe - Insurance

• Insurance– Does your current Insurance Provider cover

internationally?– Need to know what are the insurance requirements of

each country– Office space

• Need to know - Square Foot& Square Meters, how many employees, what is in the office, uses of the office, structure of the office

• Remote employees or Contractors

Location of your international office

• Before you set up an office, make sure you want to be there and can expand

• China example– Local government officials and mayors have to

give permission for you to leave their district– All taxes have to be paid

Chinese quote about moving offices

• The day after a fortune 500 company submitted the application, the mayor of old district visited company and expressed their unwillingness about the relocation plan. The phrase used by the mayor was

“When a tree grows big and matures, its fruit should be contributed to the mother land where it was originally raised but not to the land of someone else...”

• After that meeting, the old district immediately initiated a tax audit of the company on its historical tax position.

All Hands on the Globe - Treasury

• Treasury – The Banking– What about the FX exposure, currency conversion fees,

timing of payments?– What are the requirements to make payments?– How are you going to fund the accounts?

• Different legal entities – how to handle– Can you see all the accounts around the world?– Can you pool funds?– How does a Line of Credit Work – in each country?– Fees – who pays?

All Hands on the Globe - Treasury

• Treasury – Setting up the Accounts– What is a ….

• Current account/Normal account• Scheme – What is a Scheme?

– Does your current bank have local offices?– Can your bank make payments in local currencies? – Can your bank receive local currency payments?– Who will the signers be?

• Does someone have to be local– What are the requirements to set up a bank account

Implementation Phase –Degree of difficulty by country

Low

• Australia• Canada• England• France• Ireland• New Zealand• Switzerland• The Netherlands• United States

Medium

• Belgium• Germany• Indonesia• Italy• Korea• Malaysia• Philippines• Spain

High

• Brazil• Hong Kong• India• Japan• Mexico• Singapore• Taiwan

Implementation Phase: Documentation can be daunting

Corporate Documentation• Each country requirement is different – ensure you know what the requriements are for each• Do you need to send originals – Assume YES

Verficiation of signers• Who needs to be listed as a signer on accounts? Will someone from corporate be listed on all

global accounts?• Provide passport copies for each signer. Some countries require them to be notorized

Account Opening Application• Ensure all services are added to the accounts (internet statements, on-line f/x, internet banking,

local ACH

Credit needs• Communicate with your global provider your credit needs early in the process• Example of credit needs include overdraft facilities, ACH credit lines, F/X lines, Bank gaurantees,

letters of credit , cross border sweeping

Implementation Phase:Sample of Documents needed for Hong Kong

NO. DOCUMENT NAME PURPOSE / INFORMATION INSTRUCTIONS TO CUSTOMER

1 Certificate of Incorporation or Equivalent Document

A legal document relating to the formation/registration of a company or corporation.

Regulatory Requirement

Provide certified true copy by a suitable certifier.1

2 Business Registration Certificate (for HK registered entities ONLY)

A legal document relating to the registration of a business in Hong Kong.



3 Memorandum and Articles of Association or Company By-Laws

The regulations governing the relationships between the shareholders and directors of the Company. Commonly used during formation to define a legal constitution.

Bank Policy


4 Identification documents* of the following: At least 2 Directors All Authorized Account

Signatories. All Principal Shareholders /

Ultimate Individual Beneficiaries** (owning 10% or more).

At least 2 Directors.

* Identification documents can include ID Card, Passport, Drivers License and may even be a combination of these documents.

Identification documents must contain: Full name Identification number Date of birth Nationality

** "Principal Shareholders" are the ultimate individual owners entitled to exercise, or control the exercise of 10% or more of the voting rights of the Customer.

If a company owns 10% or more of the Customer, the Bank would need to obtain identification of the ultimate individual owners who own such a company.



Document Checklist Continued – Hong Kong Privately Held CompanyCorporate Resolution – Documents the authority of the Customer to

enter into a banking relationship and authorized services.

Bank Policy

Complete all applicable information.

To Sign and Return. [Authorized Signer(s) required]

Business Signature Card – Obtains specimen signatures and signing limitations of authorized signatories.

Bank Policy Complete all applicable information. To Sign and Return. [Authorized Signer(s) required]

Organization Chart or Comparable Document

A document showing the company structure, all the way up to the ultimate individual owners and the percentage of ownership at each level.


Provide notarized copy by a Notary Public.

Form W-9 This is required for a US Person opening account(s) in . [ Person includes corporations, partnerships, trusts, individuals and other entities formed or created under law, including the Asia Branch and Representative Office of a US Person.]2

Tax Requirement

Customer to refer to their tax advisor or web site: www.irs.gov to obtain the relevant tax form.

To Be Obtained As Required:Certificate of Incumbency or Comparable Document

Required for verification of corporate position and signature of Directors (and Officers who sign forms/documents), as relevant.

This certificate should list the name, title and specimen signature of the Directors and Officers.


Provide notarized copy by a Notary Public.

http://www.irs.gov/

Post Implementation – Things you should know - Europe

Banking Requirements by Country – Swift/ BIC• Decoding the SWIFT Code

IBAN (International Bank Account Number)• Bank account information for your accounts throughout Europe (in the Eurozone)• Each IBAN is a combination of the bank routing information and your account number

SEPA• Pan European “ACH” settlement for the Euro zone. • International Euro payments throughout Europe can now be made by “ACH” vesus wire. Reduce

your cost.

Post Implementation – Things you should know - Asia

Banking Requirements by Country – Swift• Understand local banking practices and how clearing is handled (paper, local ACH, timing of

clearing, return policy

Foreign Exchange requirements• There are many regulated currencies in Asia that must be held in country.

Interest Income• Regulations differ by country on paying interest on deposits. • Some countries are regulated on the amount and the tenor that can be paid (China)

Resident vs. Non-Resident Accounts• Some countries will not permit non-resident accounts in local currency (Taiwan,

2012 Holiday Calendar

Questions & AnswersBob Barnes CTP, AAPDirector of TreasuryAlliance [email protected]

Janette Hutton, CTPInternational Treasury SpecialistJPMorgan [email protected]

mailto:[email protected]

mailto:[email protected]