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
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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
Pre-Implemenation Phase – Essential Factors for a Successful Project
Communication
Clearly articulate
the corporate
benefit and
communicate often
to each party
Stated Company
Objective
Clearly defined
corporate objectives
that outlines
benefits to entire
organization
Assemble the
Team
Ensure appropriate
representation
from the entities
as well as IT
resources
Comprehensive Project
Plan
Ensure all the needs of
each subsidiary is met and
the corporate goals are
clearly articulated
CFO Support
Essential for a
success projet to
have the support of
the CFO
Comprehensive
Project Plan
Pre-Implementation Phase – Gathering the necessary information
Ensure you understand each country’s/subsidiaries banking practices today –
and their needs going forward.
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 – Analyzing the Data
Expense reduction
Reducing counterparty /
sovereign risk
Building a
Business
Case
Control /Audit /Fraud
Increase in use of excess
cash (self funding or
increase in returns)
Visibility of cash balances
world wide
Implementation Phase:
Establishing a foundation for a successful Implementation
Strategy
• Establish realistic goals and roadmap
for implementation
•Phased approach or big bang
change
• Select phases carefully
understanding other intiatives
affecting each subsidiary
Planning
•Develop project plan in conjunction
with all areas affected
•Treasury/Finance/Accounting –
Corporate and abroad
• External Providers (banking
partner, treasury workstation)
• IT resources
Implementation
Communication
•Hold initial kick off meeting with the
team
• Roles and responsibilities of
each member
• Implementation approach
• Timeline for completion
• 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
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
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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
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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?
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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
Australia
Canada
England
France
Ireland
New Zealand
Switzerland
The Netherlands
United States
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Belgium
Germany
Indonesia
Italy
Korea
Malaysia
Philippines
Spain
High
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Medium
Low
Implementation Phase –
Degree of difficulty by country
• 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.
1
DOCUMENT NAME
PURPOSE / INFORMATION
Certificate of Incorporation or
Equivalent Document
2
Business Registration Certificate (for
HK registered entities ONLY)
3
Memorandum and Articles of
Association or Company By-Laws
4
Identification
following:
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documents*
of the
At least 2 Directors
All Authorized Account
Signatories.
All Principal Shareholders /
Ultimate Individual
Beneficiaries** (owning 10% or
more).
At least 2 Directors.
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A legal document relating to the
formation/registration of a company or
corporation.
Regulatory Requirement
A legal document relating to the registration of
a business in Hong Kong.
Regulatory Requirement
The regulations governing the relationships
between the shareholders and directors of the
Company. Commonly used during formation to
define a legal constitution.
Bank Policy
* Identification documents can include ID
Card, Passport, Drivers License and may even
be a combination of these documents.
Identification documents must contain:
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Full name
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Identification number
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Date of birth
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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.
Regulatory Requirement
INSTRUCTIONS TO CUSTOMER
Provide certified true copy by
a suitable certifier.1
Provide certified true copy by
a suitable certifier.1
Provide certified true copy by
a suitable certifier.1
Provide certified true copy by
a suitable certifier.1
Document Checklist Continued – Hong Kong Privately Held Company
Corporate Resolution –
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Business Signature Card –
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Documents the authority of the Customer to
enter into a banking relationship and authorized
services.
Bank Policy
Obtains specimen signatures and signing
limitations of authorized signatories.
Bank Policy
Complete all applicable
information.
To Sign and Return.
[Authorized Signer(s) required]
Complete all applicable
information.
To Sign and Return.
[Authorized Signer(s) required]
Organization Chart or Comparable
Document
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Form W-9
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To Be Obtained As Required:
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Certificate of Incumbency or
Comparable Document
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A document showing the company structure, all
the way up to the ultimate individual owners and
the percentage of ownership at each level.
Regulatory Requirement
Provide notarized copy by a
Notary Public.
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.
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.
Regulatory Requirement
Provide notarized copy by a
Notary Public.
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 & Answers
Bob Barnes CTP, AAP
Director of Treasury
Alliance Data
Bob.Barnes@AllianceData.com
614-729-4725
Janette Hutton, CTP
International Treasury Specialist
JPMorgan
Janette.M.Hutton@AllianceData.com
317-826-2198