Finding, Vetting and Selecting Experts to Help You Grow Globally/media/Files/... · 2015. 6. 23. · Finding, Vetting and Selecting Experts to Help You Grow Globally 5 AMERICAN EXPRESS

Finding, Vetting and Selecting Experts to Help You Grow Globally | 2015 1

AMERICAN EXPRESS GROW GLOBAL INSIGHTS SERIES

Finding, Vetting and Selecting Experts to Help You Grow Globally

Middle market companies often too quickly conclude that the magnitude of effort, complications of international business, transactional risks and unanticipated hurdles of exporting are too daunting to overcome. Concern for maintaining focus on domestic initiatives and fear of perceived risks often cause companies to prematurely shelve proactive export growth plans.

Those that press ahead are often pleasantly surprised. The spotlights on risks, complications and barriers to exporting tend to exaggerate reality (For more on this, please download our guide, “Myths and Opportunities for Middle Market Exporters”).

The most common concerns focus on transactional details like payments, logistics and foreign currency – and as they dig in, companies discover that expertise and assistance is widely available to help them manage these technical points.

There are also bigger topics that companies, even experienced exporters, often overlook that may help maximize the potential for success. Some represent risks which should be mitigated, and others, opportunities to maximize. The good news is there’s a cadre of professional advisors, some available at low or no cost, who can help ask the right questions, based on the right breadth of experience, to help guide you.

The right advisors are critically important to a company’s export performance − either positive or negative. Professional advisors that support a company’s domestic activities may be entirely or partially capable of proactively supporting export growth − but they may also have some significant blind spots.

This guide is designed to help you identify core skills and knowledge required to develop an export strategy. It will help you identify areas of expertise you’ll need to tap into to mitigate export risks and implement an execution plan.

Risks, Complexities and the Unknown

https://business.americanexpress.com/us/business-trends-and-insights/growing-smart




Skill SetsMany you may have and others you’ll probably need.

As you start and grow your exports, you’ll need experienced advisors in some general areas including:

Obviously some areas overlap, and sometimes an experienced business person can identify and address issues on their own. You don’t necessarily need additional or new professional advisors, but you do need to address areas of risk and opportunity.

This guide focuses on the domestic advisors you’ll work with – but sometimes you’ll also need local market assistance. For instance, in the U.S., your attorney and accountant have distinct responsibilities. In some export markets, though, a “Chartered Accountant” may be the best source of advice on routine legal matters and accounting questions.

The best place to start is with your current advisors, so be sure to inform them of your intent to begin exporting.

As you inventory the expertise already at your disposal, keep in mind that your advisors may have the same blind spots as you. In many cases very capable advisors will assume they can provide the expertise you’ll need. Maybe they have for others whose “international” requirements were less complex, or maybe they missed opportunities of which they weren’t aware.

To get you started, we’ve pulled together some insights − but of course this is not an exhaustive list. For each of the categories you’ll find examples of:

• Types of expertise you may require• Representative challenges that could arise for which you’d need assistance (ideally to preempt, but

possibly to resolve)• Questions to help gauge a potential advisor’s aptitude in common situations

These are suggestions. Some companies will have broader and deeper requirements, and some will need far less. However, the nature of the representative challenges are designed to help you determine how knowledgeable you and your internal team are to anticipate such events.

Finally, we offer example questions. Often the way in which they are answered (confidence, anecdotal support, nuance of discussion, and related salient points that develop) are as important as the direct answers themselves.

As you read this you may ask yourself how you’d start looking for a local advisor. There are a number of options − including asking your current advisors for referrals − and one of the most convenient of which is the list of pre-vetted professionals that many of the Foreign Commercial Service offices maintain.

• Legal• Accounting

• Logistics• Insurance

• Finance• Marketing

consider the following three step process to build your team of exporting advisors:

First: understand the types of requirements you’ll have.

Second: recognize common issues that you should plan for.

Third: ask the right types of questions to find the right expertise.





Legal Identify likely issues and find international counsel.

The U.S. can be a complicated place to do business. It’s famously litigious, and regulations overlap between agencies and states. Successful managers understand the complications and concentrate on pre-empting issues. They learn to trust their instincts to help them avoid expensive legal situations. But those instincts might not serve them as well internationally. Don’t assume that the same “common sense” approach is appropriate for international issues.

likely areas of legal expertise you’ll need:

• Intellectual property (IP) − trade secrets, patents, trademarks• Compliance − export and anti-corruption• Employment• Contracts − terms & conditions, sales channel, contractors, lease• Regulatory

representative examples of important issues:

• Incoterms® 20101 − the system which is used globally to describe risk of loss and responsibility for costs in logistics − must be properly incorporated and observed

• Ensure that representative/distributor contracts can be cancelled as expected• Avoid having contractors treated as employees (with significant cost and regulatory implications)• Ensure FCPA (Foreign Corrupt Practices Act2) training and validation is adequate• Anticipate “First to File” requirements• Avoid local conflicts with limits of liability in terms & conditions• Keep website, sales materials and laptops/tablets/smart phones export compliant (deemed or

actual export)• Manage registration and ownership of trademarks to avoid squatting and counterfeit claims• Prevent unintended binding warranties (the implied promises you make when you sell your product,

which may be interpreted differently under local laws) from “agent” agreements• Avoid duty liabilities with proper harmonized tariff schedule3 (HTS) classification• Proactively identify any export licensing requirements• Monitor employee international work to prevent visa complications

example questions to ask prospective legal advisors:

You’ll want to assess the frequency, depth, breadth and intensity of their international work, and determine whether they are realistic about the scope of their expertise. Most advisors can provide a referral, but personal contacts can be a real asset.

• What percent of your clients export? What’s the average percentage of export revenue?• Do you have clients with active local agreements (rep, employee, etc.) in any specific markets?• How do you gauge when you need to engage local counsel?• How do you identify appropriate counsel in that case?• Have any of your clients been involved in any international litigation? Did you participate?• How often do you participate in international transactions?• What international IP experience do you have? Actual filings?• Have any of your clients been investigated, audited or assessed fines or collections, by U.S. or foreign

governments, for any of their activities that were global?

1 http://www.export.gov/faq/eg_main_023922.asp

2 http://www.export.gov/regulation/eg_main_018223.asp

3 http://www.export.gov/logistics/eg_main_018119.asp



http://www.export.gov/faq/eg_main_023922.asp

http://www.export.gov/regulation/eg_main_018223.asp

http://www.export.gov/logistics/eg_main_018119.asp



Accounting International business raises different considerations for accounting.

International business introduces different considerations for accounting and reporting domestically, and differences between geographies. Examples include adherence to IFRS (International Financial Reporting Standards) in the EU and elsewhere vs. GAAP (Generally Accepted Accounting Principles) observed in the U.S. For instance, transfer pricing − prices charged between related entities, such as a subsidiary or a foreign corporation with substantially common ownership − is receiving increasing scrutiny in many jurisdictions. Capable accountants who primarily focus on domestic business might not be aware of the differences in various global markets, so it’s important to find an accountant with international business experience.

likely areas of accounting expertise you’ll need:

• IC-DISC (Interest Charge Domestic International Sales Corporation4)• Transfer pricing• Foreign market tax − registration, collection, reporting


• Ensure that local registrations and filings are made to avoid fines• Properly report foreign bank accounts, ownership interest and certain transactions• Properly establish transfer pricing• Consider exports in analysis of account, product and market

example questions to ask prospective accounting advisors:

It’s important to get a sense of not only how actively their clients are exporting, but also how material their involvement is. Will they simply answer questions that you realize you should ask, or proactively support your efforts as a resource?

• What percent of your clients export? What’s the average percentage of export revenue?• How have you assisted clients that have significant international business with their borrowing facility

negotiations?• In which countries are your active exporting clients most active?• How often do you establish IC-DISCs?• What grant/subsidy programs do your other clients leverage for assistance with export development

costs? (For more information on these programs download our guide “Bench Strength: Federal, State, and Local Export Resources”)

• What lessons have they learned?• What foreign filing and reporting obligations do you currently assist clients with?• How do you know when you need to pull in a local market resource? And how do you find one?• How do you advise clients who grow frustrated and question their investment in building an export

program? What about quantifying the opportunity and weighing sunk costs?

4 http://www.claconnect.com/Tax/IC-DISC-Interest-Charge-Domestic-International-Sales-Corporation-Export-

Incentive-for-Manufacturers.aspx#.VVCGTtNViko



http://www.claconnect.com/Tax/IC-DISC-Interest-Charge-Domestic-International-Sales-Corporation-Export-Incentive-for-Manufacturers.aspx#.VVCGTtNViko

http://www.claconnect.com/Tax/IC-DISC-Interest-Charge-Domestic-International-Sales-Corporation-Export-Incentive-for-Manufacturers.aspx#.VVCGTtNViko



Logistics Stepping out globally increases the complexity of logistics.

Free on Board (FOB) ship point vs. destination, daily package pickups and easy access to common carrier dispatchers may be all you worry about as you move even large volumes of domestic freight. You might rely on a third party logistics provider to elevate your logistics to provide better service and capture additional savings. But stepping out globally increases the complexity of this function dramatically. Don’t undertake to manage that increased complexity internally − you’ll risk wasting enormous amounts of time and incurring costly errors.

A great logistics team (freight forwarder and customs broker) should make logistics as easy as a phone call or email to start the process, and a clear, consolidated, competitive invoice as quoted, to finish the process. However, be aware that this is one of the toughest gaps to fill − after all, every freight forwarder has extensive global experience, so you can’t simply screen for that. Often their systems for communication are the best guide upfront, and only after several shipments will you really know whether they’re right for you. As with each of these areas, not all responsibilities can be outsourced. Denied party screening (to satisfy U.S. government requirements to check your buyer prior to shipment), for instance, will be your company’s responsibility.

likely areas of logistics expertise you’ll need:

• Advice regarding packaging, routing and documentation• Clarification of Incoterms® 20105 (including insurance obligations, requirements and options)• Precision of execution and reliability • Proactive communication regarding status of shipment• Quick, accurate quotes including options for mode and routing• Hassle-free, FCPA compliant customs clearance• Consistently appropriate pricing for routings


• Avoid costly reratings and penalties due to incorrect Harmonized Tariff Schedule (HTS) classification• Prevent customs clearance delays with accurate documentation• Proactively identify and manage special packaging requirements• Accurately predict transit times and landed costs• Confidently manage payment risk with proper insurance coverage when it’s left to the risk bearing

party • Prevent expiring L/Cs and order cancellation dates due to delayed clearance• Ensure that freight quotes include all costs • Proactively track shipments in transit• Maintain export compliance with required denied party screening

example questions to ask prospective logistics advisors:

• We’ve all had unhappy clients. When your clients leave, what’s the most common reason?• How do you keep clients informed of the location and status of shipments proactively?• What markets do you specialize in shipping to?• Do you ever suggest that clients purchase containers? In what circumstances?• Do you have preferred rates with specific air and steamship lines? Which ones?• With what frequency and for what markets do you have regularly scheduled consolidations?• What are the last five creative suggestions you proactively made to clients that helped improve their

outbound global logistics?

5 http://www.export.gov/faq/eg_main_023922.asp



http://www.export.gov/faq/eg_main_023922.asp



Insurance Plan appropriately to safeguard your business.

Here’s some good news. There are very few markets more litigious than the one in which you’re already active. So insurance, for its important role of “cost of defense,” may be less important globally. But there are product liability, risk of loss and other issues to plan for. And the “insurance” category often crosses lines of disciplines. Therefore, this may be more of a functional consideration than a professional advisory hole to plug.

likely areas of insurance expertise you’ll need:

• Foreign emergency medical• D&O (Director & Officer) protection• Foreign receivables credit exposure• Security and medical evacuation• Adequate and appropriate liability protection• Coverage for issues you might not think of domestically (political risk, disparaging claims for

instance)• Protection against loss of product in transit, as noted in logistics section


• Prepare for travel medical emergencies such as return transportation for an employee injured in an accident overseas

• Anticipate D&O cost of defense for an FCPA enforcement action• Protect against large scale default occurrences on foreign receivables because of sudden, large

currency movement impacting several customers• Ensure that product is insured against damage in transit when customer’s uncovered risk of loss

could result in refusal to pay open balance• Protect against political risks such as nationalization of a local joint venture• Protect consignment inventory against loss in local partner theft• Ensure limitations of liability are enforceable within local regulations• Cover loss of revenue due to political instability• Plan to assist employee stuck in unrest should riots break out

example questions to ask prospective insurance advisors:

• What additional questions would you be asking about my insurance requirements if you knew that we were actively growing our export sales?

• What risks and exposures have you seen catch companies by surprise as they pursue international business?

• How does your annual review process differ for clients with global activities?• What critical areas of international exposure do you focus on with existing clients? How does that

vary by industry? Market?• Do you write coverage for companies with physical foreign operations?• What particular liability might we face as a result of our global activities?• Are there special considerations for owners, officers and directors around international business

activities?





Finance Supplement your current finance team with international expertise.

Your commercial banker might be a resource – but they may perceive international expansion as creating risk for them (you’ll have to help them understand why it’s actually beneficial for both of you) and they may be unfamiliar with some of the international payment, currency and credit considerations. That’s okay; there are resources. But this may fall mostly to you to educate yourself.

At the same time companies’ internal CFOs may have limited, or specific, international experience that requires complementary, proactive perspectives. Unlike many of the functional areas covered here which are focused on risk mitigation, this is an area to create and expand opportunity, revenue, profitability and strategic impact.

likely areas of finance expertise you’ll need:

• Scalable financing for working capital to meet export orders• Foreign customer and partner credit management• FX (foreign exchange) planning and execution• International payment process• L/Cs (Letters of Credit) and other binding financial requirements• International banking relationship management• Interface with accounting on strategic, reporting and compliance issues• Exploring partnership and acquisition approaches to market entry• Third party screening• Managing foreign buyer financing


• Assist local buyers in finding low interest U.S. export financing options• Mitigate payment risk of international receivables• Position international receivables for inclusion in asset based borrowing calculations• Manage alternatives to notoriously expensive and complicated L/Cs• Track various grant and subsidy programs to offset costs of export growth (To learn more, download

our guide, “Bench Strength: Federal, State, and Local Export Resources”)• Open a multi-currency account to simplify incoming payment receipt• Compare and manage FX (foreign exchange) brokerage options and incorporate hedging strategies• Financial analysis should include not only sunk costs and investment in export growth, but also

strategic benefits and valuation implications

example questions to ask prospective finance advisors:

• How often have you had to conduct international due diligence?• How do you suggest establishing credit procedures for foreign buyers?• What global payments methods have you used?• Have you ever been involved in an international corporate M&A transaction? Did the deal close? • What’s your approach to hedging FX risk?• How would you suggest developing forecasts and budgets for a nascent export sales program?• Have you ever worked with any of the U.S. or state government programs that provide grants,

subsidies, tax breaks or financing in support of global business growth?• What about global growth worries you from an enterprise valuation and long-term strategy

perspective? What excites you?





Marketing The Internet makes marketing business globally easier than ever.

You may be thinking translation − assuming that your standard sales brochures and website can be copied into various languages for full effect. Unfortunately it isn’t always that simple. After all, you’ve probably received A4 (European version of 8.5X11” letter) size brochures from companies with unfamiliar units of measure and business terms. The good news is that with the right marketing savvy, the Internet is an incredible global business development tool.

likely areas of international marketing expertise you’ll need:

• Pricing and competitive analysis• Localization and transcreation (creating materials specifically for a market)• Global Search Engine Optimization (SEO)• Buyer and market research• Local regulatory compliance (data, privacy, claims, competitive reference)• International sales and channel partner enablement


• Ensure that local regulations (e.g. website cookies and traditional email opt-in lists) are observed• Optimize for geo-targeted SEO using local language rather than English• Understand buyer expectations, decision criteria, buying cycles, and service expectations rather than

assume they match your domestic market• Create channel partner training and enablement resources• Don’t just translate – you’ll end up with information that’s well written but not local• Manage the details – U.S. toll free numbers can’t be reached by foreign buyers; brand/corporate

TLDs (top level domains) may be unavailable (or undesirable with local meaning) in specific markets• Avoid local complications when competitive comparison (typical side-by-side matrix) may constitute

commercial infringement• Create local packaging and labeling (imagery, text, contents, language, etc.) that’s best for each

market

example questions to ask prospective marketing advisors:

• How would you approach an international marketing project?• When is translation a helpful step?• Give me a couple examples of missteps that you’ve made internationally?• What clients have you hit home runs for globally? What’s the product/service? Price point? Where

were they successful?• How do you see digital marketing supporting international growth?• What product localization have you had to implement?• Aside from localization, product marketing globally normally requires specialized pricing,

competition and use case research. How do you do that?• How about global sales field marketing and channel support, what success have you had in that

area?• Do you rely on an international SEO partner?





Details & VisionEvery business is unique. Seek partners that support your strategy.

These are general categories, and not all details fit easily into one, or even into any of these categories. So network with other exporters, ask your advisors and consult with resources like your local U.S. Department of Commerce Export Assistance Center (USEAC) about what really well prepared companies do and plan for. (For more information on the various resources available to support your export efforts, download our guide, “Bench Strength: Federal, State, and Local Export Resources”) Create Google alerts for topics and countries of interest and subscribe to blogs on relevant topics. You’ll encounter stories of other companies’ wins and struggles.

You’ll realize that with a bit of preemption you’ll protect your company, and that with some foresight you can position the business for greater opportunity. At the intersection of these disciplines, your high-level business perspective will help you create solutions and approaches that are right for your company and your target geographies.

examples of protection include:

• Establishing travel policies and procedures to ensure your employees are safe and secure while simultaneously managing travel expense is both a duty of care and financial imperative

• Monitoring social media activity for independent contractors can be important to ensure that exaggerations of their role on your behalf can’t be used by local tax authorities to demonstrate a nexus requiring local tax registration, filing and payment

examples of opportunity may involve:

• Supplementing organic growth with possible local joint venture and acquisition opportunities (including identification, due diligence and negotiation) to accelerate market penetration

• Implementing specific R&D / product localization to create products that satisfy unique, unmet local requirements





10

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https://www.linkedin.com/company/american-express-global-corporate-payments

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Optimism With a Touch of CautionThe key to realizing the benefit is to avoid complications and costs arising from missteps.

You’re not deterred by business risk − you manage it successfully every day. As a U.S. middle market company, in fact, you play a huge role in the economy. You’re focused on growth and the future.

Exporting offers an opportunity for even more exciting growth. The key to realizing the benefit is to avoid complications and costs arising from missteps. That’s where the right advisors can complement your business acumen.

They will help you identify and mitigate key risks based on your business model, products/services and active markets. Then they’ll advise on reasonable steps to manage the many other considerations, which are often addressed simply through awareness or specific proactive planning.

Don’t disproportionately obsess over exporting risk. It’s a fact of business everywhere − and business is the real focus. Sustainable, profitable growth that takes advantage of opportunities specific to certain regions and regulations is ultimately the goal.

with the right advisors stewarding your efforts, global growth will become a substantial, valuable component of your overall revenue growth.



https://www.linkedin.com/company/american-express-global-corporate-payments





Grow GlobalAmerican Express Grow Global provides resources for U.S. middle market companies to help assess the risks and rewards at several stages of their exporting journey.

While middle market firms represent less than one percent of American companies, they create 21% of revenue and 28% of employment in aggregate, and have created more than 90% of the net-new jobs in the U.S. since the 2008-09 recession.6

These outsized contributions are largely based on a U.S.-centric business strategy. Imagine the potential growth and economic impact of the middle market segment with an increased emphasis on global sales.

The Grow Global Insight Series was created to help get middle market businesses on the path to expanding business internationally and boosting profits. For more about American Express Grow Global, please visit www.americanexpressgrowglobal.com.

6 Middle Market Power Index, available at http://amex.co/1PlhL3v



www.americanexpressgrowglobal.com

http://amex.co/1PlhL3v



GlossaryDirector & Officer (D&O) protection: Protection or defense from claims which may arise from the decisions and actions taken as a director or officer of a company7

Foreign Commercial Service Offices: The local, in-country resource center for Federal Export Assistance programs

Foreign Corrupt Practices Act (FCPA): Enacted in 1977 to prohibit the payment of bribes to foreign officials to secure business – to learn more, visit www.sec.gov/spotlight/fcpa.shtml

Foreign Exchange (FX): The conversion or exchange of one kind of currency into another kind of currency

Free on Board (FOB): When the seller delivers goods through a buyer-designated vessel

Generally Accepted Accounting Principles (GAAP): The set of rules, conventions and standards that guide companies’ accounting and reporting

Harmonized tariff schedule (HTS): The resource used to determine the tariff classifications for goods that are imported into the U.S. − to learn more, visit www.usitc.gov/glossary/term/harmonized-tariff-schedule-united-states-hts

Incoterms® 2010: The system from the International Chamber of Commerce that is used globally to describe risk of loss and responsibility for costs

Interest Charge Domestic International Sales Corporation (IC-DISC): Potential tax saving opportunities for qualifying exporting companies

International Financial Reporting Standards: Accounting standards developed by the International Accounting Standards Board (IASB)

Letters of credit (L/C): A bank document guaranteeing that payment will be received as long as the agreed delivery arrangements are met

Search Engine Optimization (SEO): A strategy to help increase the visibility of a webpage in online search results

Top Level Domains (TLDs): Domain names that range from .com to .org to country specific domains like .us for the U.S. and .ca for Canada

U.S. Export Assistance Center (USEAC): Local resource center to assist U.S. exporters in leveraging the full range of support available through the U.S. Department of Commerce

7 http://www.agcs.allianz.com/assets/PDFs/risk%20insights/AGCS-DO-infopaper.pdf



https://www.sec.gov/spotlight/fcpa.shtml

http://www.usitc.gov/glossary/term/harmonized-tariff-schedule-united-states-hts

http://www.usitc.gov/glossary/term/harmonized-tariff-schedule-united-states-hts

http://www.agcs.allianz.com/assets/PDFs/risk%20insights/AGCS-DO-infopaper.pdf


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The contents of this published material are protected by copyright and the reproduction, republication, distribution, and/or retransmission of the contents of this site is prohibited without the prior written consent of American Express. Written consent can be requested at: [email protected].

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Finding, Vetting and Selecting Experts to Help You Grow Globally/media/Files/... · 2015. 6. 23. · Finding, Vetting and Selecting Experts to Help You Grow Globally 5 AMERICAN EXPRESS