22 international trade It makes sense to go global
With Britain enduring the longest economic downturn of its kind in a century, it is sensible to develop new revenue streams on the world stage, where possible, writes Chris Appleton of Smith & Williamson
As a nation, we‘re good at developing new markets. So any companies in the Solent region contemplating international trade, away from the shifting sands of the EU, will not be alone.
In markets such as India, there is likely to be rising demand for knowledge-intensive services from UK plc, ranging from due diligence to the safeguarding of intellectual property.
Yet any discerning business will need to research exhaustively, using either its own resources or well-informed advisers on export assistance, how to establish a presence abroad. The cross-border issues are complex, giving rise to many risks.
These risks include macro factors, such as evolving political and economic developments, to micro factors, such as tax anomalies,
dividend restrictions, local levies, regulations, cultural preferences, law enforcement, transport legislation, IT security, language barriers, compliance and customs.
Once these issues are identified and overcome, the opportunities can be immense. As a result, Smith & Williamson is seeing many more local businesses actively pursuing an international agenda.
Our reputation, domestically and overseas, is based on what we have delivered for clients.
Our success in this arena is based on a truly international outlook and our global reach through membership of Nexia International, a leading network of independent accounting and consulting firms with more than 570 offices in over 100 countries. Members are committed to a personal approach and high-
quality advice for growth companies.
Examples of our overseas work include:
• Help in setting up operations for two of our clients in the USA
• Worldwide personal tax compliance for directors of a global group of companies
• Restructuring ownership of overseas subsidiaries following a strategy change
• Lead advisers on overseas acquisitions
• Planning and sourcing funding needs for overseas growth.
Given the poor economic position both here and in Europe, we are committed to seeing our clients grow their international business.
Appleton, senior partner in the assurance and business services team at Smith & Williamson‘s south coast office, focuses on international trade: markets beyond Europe, cross-border issues and export assistance
Details: Chris Appleton 023-8082-7622
chris.appleton@smith.williamson.co.uk www.smith.williamson.co.uk
UK businesses need to enter new markets
One of the most crucial factors in the UK‘s economic recovery will be the willingness of British businesses to trade internationally, writes David Squibb, regional trade director at Lloyds Bank Wholesale Banking and Markets
Businesses must look to export if the economy is to grow; however with much of Britain‘s traditional export market facing similar economic difficulties, British companies must look further afield for opportunities.
New export opportunities
Many economies that have traditionally been known as the ‘emerging markets‘ have now in fact emerged, and are looking highly likely to outstrip the US and Europe in terms of GDP growth in the medium-term. China and India, to take two examples, present British businesses with a strong opportunity to grow their exports. Some are already beginning to recognise this fact, and UK exports to China in the year to September 2011 actually grew by 24%. However, even
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with this increase, the UK‘s total exports to China still equate to only a fifth of what the UK exports to Belgium. India used to receive 6% of its imports from Britain; now it is only 2%. So it is clear that opportunities exist for British businesses outside of the traditional export market.
There are of course a number of challenges posed by exporting to new markets, and before a business enters into trade agreements with foreign partners it is crucial to conduct detailed research. The key to this approach is talk with banks and local Chambers of Commerce who can provide invaluable guidance on trading conditions in particular overseas territories. Embassies also provide a great deal of assistance, and can undertake local research on behalf of a potential exporter.
Financing international trade
Once a trade agreement is reached, it is important to have sufficient trade finance in place to cover the expected cashflows. Overseas trade tends to use more working capital than domestic trade, making it crucial to work with a bank team that has the international experience and specialist trade finance expertise
to find the correct solution. In the past few years we have seen a gradual shift away from open account trading towards more structured trade finance options to support the supply chain. There has also been a resurgence in the use of traditional payment instruments such as the documentary credit and bill of exchange, together with the use of discounting to accelerate cashflow or improve margins.
Exporting opportunities are there for companies willing to open up to new markets, and with the right preparation and careful use of trade finance, there is no reason why British businesses should not look to capitalise on these opportunities and secure growth in the long term.
Details: David Squibb – 07860-497170 Steve Clarke – 07920-207685
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JULY/AUGUST 2012
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