Media Coverage

1. Lithuania’s regulatory adaptation and transparencySince early 2017, the Bank of Lithuania has instigated the rapid development of a FinTech-conducive regulatory and supervisory ecosystem, which continually fosters innovation in the financial sector. The two most notable events were:first, by opening a regulatory sandbox in late 2018 to allow startups and FinTechs to test their innovative products in a live environment under the guidance and supervision of the Bank of Lithuania.5Second, as a result of the UK’s EEA departure and in the absence of an agreement on financial services cooperation between the EU and the UK, some UK companies with licensed activities subsequently passported into the EEA not wanting to be locked into only one single market. Lithuania has led by example, by inviting financial service institutions under their roof with an appealing and easily understood regulatory regime, attractive marketing plan, convincing regulatory supervision, as well as rapidly adapting national regulations for FinTechs, InsurTechs, RegTech, and other startups.One of the most recent examples is Revolut, which transferred its EU customers from its UK-based company to a Lithuanian company. After setting up a Lithuanian company and acquiring a license for its activities, Revolut’s Lithuanian company has passported its licensed activities based on the provision of services without a branch in the other 29 EEA Member States, providing clients uninterrupted services. Revolut went even further by establishing and acquiring a Special Purpose Bank (“SPB”) license. The latter license permits Revolut to receive deposits and other repayable funds from its clients (Revolut currently provides this service in a total of 13 Member States).In terms of numbers, Lithuania edges ever closer each year to the level of the UK within The World Bank Ease of Doing Business rankings. While Lithuania continues to improve its regulatory regime, in some areas (ahead of the EU), the existing transparent regulator and ‘easy on the eye’ regulations, Lithuania is leaning towards becoming the dominant “Fintech Hub” in the EU.The most popular licenses in LithuaniaAlmost half of the FinTech companies in Lithuania hold an Electronic Money Institution (“EMI”), Payment Institution (“PI”), or SPB license. A majority of these companies can alsoissue prepaid cards and digital wallets for the benefit of their clients, in addition to making money transfers.E-money and payment licensesThe respective provisions of the Lithuanian Law on Electronic Money Institutions defines “electronic money” as a monetary value as represented by a claim on the issuer which is issued on receipt of monetary funds by the electronic money issuer from a natural or legal person and has the following characteristics: (i) stored electronically (incl. magnetically); (ii) is issued for the purpose of making payment transactions; and (iii) is received by persons other than electronic money issuers.For any FinTech company to be able to accept money from clients in the ‘electronic domain’ and to hold it in payment accounts for a relatively long time, issuing electronic money and then redeeming it, prior to being able to do, it is first necessary to become an electronic money issuer.The Bank of Lithuania supervises and authorizes electronic money and payment institutions within Lithuania. The authorization process usually includes: (i) submitting an application for an EMI license to the Supervision Service of the Bank of Lithuania; (ii) an assessment of the application for a license of an EMI and attached documents; and (iii) issuance of a license or refusal to issue a license.The entire authorization process, depending on the completeness of the documents submitted, usually takes around 6 to 12 months.If, however, a FinTech company already holds an EMI license and respective documentation in the UK it is considered to be an advantage in producing the necessary documents, as well as saving time during the authorization process.An SPB licenseA key feature of an SPB is the minimum capital requirement of EUR 1 million, while for traditional banks, it is EUR 5 million.In terms of timing, it is possible to acquire an SPB license within 9 to 12 months.An SPB differs from a traditional bank and comes with a number of restrictions attached to the services which an SPB can provide. An SPB is subject to limitations in investment and other financial services of a similar nature. The respective services an SPB can provide are the following:1) acceptance of deposits and other repayable funds;2) lending (including mortgage loans);3) financial lease (leasing);4) payment services;5) issuance and administration of travelers' checks, bills of exchange, and other means of payment, if these activities do not include payment services;6) provision of financial sureties and financial guarantees;7) financial intermediation (agent activities);8) money management;9) creditworthiness assessment services;10) rental of safe deposit boxes;11) currency exchange (in cash); and12) issuance of electronic money.One of the notable benefits of holding an SPB license is the deposits of any one individual may reach up to EUR 100,000 and are insured under the deposit insurance scheme. SPBs are participants of the deposit insurance system and are obligated to make regular (ex-ante) and special (ex-post) deposit insurance contributions to the Deposit Insurance Fund of Lithuania.Importantly, an SPB license is valid across the EEA and activities can be passported to the other Member States enabling access to the EEA financial services market. As previously mentioned, a good example is Revolut.CENTROlinkThe Bank of Lithuania operates a CENTROlink system designated for processing and executing payment orders between Single Euro Payments Area (“SEPA”) participants.The Bank of Lithuania provides technical access to SEPA schemes (credit transfers (“SCT”), direct debit (“SDD”) and instant payments (“SCT”)) for all types of payment service providers – banks, credit unions, e-money, or payment institutions – licensed in the EEA.Any EEA licensed payment service provider has an option to access CENTROlink, given there is no mandatory requirement to establish an entity in Lithuania to access CENTROlink.A recent example of a financial service institution accessing CENTROlink is TBI Bank EAD. The latter is registered in Bulgaria and has passported its activity to Lithuania and the Bank of Lithuania has approved its access to CENTROlink system.Employee Stock OptionsOn 1 February 2020, new tax-favorable legislation for the treatment of employee stock options came into effect in Lithuania.Employee stock options can be exercised at no cost or for lower than their fair market value price, but no earlier than three years of holding stock options, from the date they were granted, are treated as non-taxable income for personal income tax purposes.Access to capital markets and alternative sources of financingTo encourage the development of capital markets in Lithuania, micro, small, and medium-sized enterprises (“SMEs”) can reimburse the costs incurred in acquiring third-party advisory services necessary exclusively for the listing of shares and/or bonds.In such a way, SMEs can access alternative sources of financing with initially lower cost, for example, by receiving advisory services on setting set up a compliant and viable structure and on the respective financial instruments to be provided in the marketplace.In recent years, the government has paid a lot of attention to the development of capital markets. Legislation has been adopted to develop alternative sources of financing: (i) a legal framework for crowdfunding and peer-to-peer lending has been established; and (ii) private limited companies have been allowed to issue bonds publicly. Gather detailed information for your business expansion into LithuaniaThis is just an initial look at some of the considerations when expanding your company into Lithuania. To help with this mammoth task we have launched a new completely free platform - Centuro Connect, that dives into specifics for each country helping you do your research all in one place!It is completely FREE - no hidden costs - just the ultimate tool for understanding market entry options, HR, Immigration, Legal Requirements, Tax & Accounting, access to our global business network, and much more …. with 100 + countries (including Lithuania) it has the specific information you need from our team of business expansion consultants.Take a look at the platform here! 

Estonia’s e-government and embrace on digital platformsIn 2014, Estonia became the first country in the world to offer electronic residency to individuals from outside the country. The E-residency program equips e-residents with a digital identity and the status provides individuals access to Estonia’s transparent digital business environment.With the e-residency kit, an e-resident can sign documents and can establish a company online from anywhere in the world, access banking, payment processing, as well as settle tax-related obligations.21A great benefit that comes with e-residency is the network of already existing e-residency entrepreneurs ready to share their experiences with outside companies who are interested in joining the community.E-money and payment licensesIn order to obtain a license to operate an EMI or for the operation of a PI, the company must submit a relevant application to the Estonian Financial Supervision Authority (“EFSA”).Depending on the licensed activities, the minimum capital requirement for an EMI is EUR 350,000 and for PIs starting from EUR 20,000 to EUR 125,000.The EFSA shall take a decision on the issuance of a license or refusal to issue a license and inform the applicant within three months after receipt of all the necessary documents, as well as detailing the reasons in the event of a refusal, but not later than within six months after receipt of the application.The seat and the principal place of business of a PI or EMI entered in the commercial register shall be located in Estonia.22Start-up status and visaOnce a startup has decided to relocate its founders and/or employees to Estonia, the first step would be to apply for the ‘Startup Status’.Once the startup holds the Startup Status, the company can hire global talent with ease and the founder can apply for a visa or a temporary resident permit.23Estonians are open to attract non-EU founders via the startup visa, which is also designed for start-ups to ease the process to hire non-EU talents.To be eligible for the startup visa a founder must have a technology-based, innovative and scalable business in mind, at least EUR 160 per month available for day-to-day needs and to receive approval from the Startup Committee.In light of recent amendments, if approved, as of 19 February 2021 the same visa will be granted to family members – spouses and children.24Stock optionsCurrently, Estonia does not hold any specific incentive scheme for start-ups, and issuance of employee share options is provided based on existing general regulations.Rules regarding the offerings of transferrable securities are used to facilitate the need and together with the tax regime currently in force (applicable to all private companies), there are favourable options.Tax exemptions for share options can be applied if an employee holds stock options for at least three years. Most of the terms and conditions attached to stock options are established within a stock option agreement between the company and the option holder.Access to capital markets and alternative sources of financingWhile the issuance of bonds and/or shares is a regulated market in Estonia (similarly as in Latvia and Lithuania), Estonians have taken a big leap and in late 2017 passed legislation with the aim to regulate cryptocurrency trading. The latter gained popularity in the amounts of initial coin offerings (“ICOs”) and token generation events (“TGEs”).25The structures of ICOs and TGEs vary and may be used to raise capital for different kinds of projects, for example, creating new coin, app or service launches. These structures provide for an alternative source of financing and are more frequently used for seed/early-stage financing, instead of the ‘traditional’ initial public offering (“IPO”) where the financing is company-based and usually is used as an exit after venture capital funding.Any ICO or TGE should be assessed on its substance to define whether they should be treated as an issuance of a security instrument or not and which corresponding regulation should be applied.26Where to go…?Well, it depends. There is no right or wrong answer.With certain limitations now visible for certain UK-based FinTech businesses trying to reach EU customers, detailed and clear thought needs to be given as to how to potentially widen the options in a fast-growing and developing industry.In the event the EU holds UK rules as equivalent to EU rules, as a result of further discussions, passporting considerations may not be necessary.Without access to the EU marketplace, it significantly reduces the actual or potential customer headcount and therefore limiting prospective growth opportunities.The Baltic States are leaning towards providing somewhat of a City ‘complement’ for FinTech businesses who wish to serve customers throughout the EEA.Regardless of the vision taken, it is important to carry out the necessary due diligence and preparations before engaging any of the regulators in either of the Baltic States.Right from pre-launch planning to initial setup and registration; Centuro Global will work with you, offering end-to-end assistance in navigating complexities by activating the local business ecosystem and offering a coherent roadmap of actionable solutions. Start on your global expansion journey with us today! Enquire today or feel free to send us an email. 

As a result of the United Kingdom (“UK”) exiting the European Union (“EU”) on 1 January 2021, a number of financial institutions in the UK lost their “exclusive” right of access to utilize the European Economic Area (“EEA”) passporting rules. These changes have also been felt by financial institutions based in Gibraltar.Back in 2016, it was reported around 5,500 UK companies with licensed activities which have passported their authorization (i.e., a licensed activity) into the EEA are impacted as a result of the UK exiting the EEA bloc.While the UK certainly has a more favorable corporate tax regime when compared to the other Member States, wider access to a larger marketplace seems to be the more favorable option in the long run for most companies. It is also without a word of doubt, the UK’s focus on retaining its presence as a financial services leader is ever strong, for example, the recent relaxation of some of the eligibility requirements for companies seeking to IPO.3Following the recent memorandum of understanding agreed between the EU-UK, concerning financial services cooperation, no visible guarantee was given to hold UK rules as equivalent to EU rules.4 While this mist of uncertainty hovers above the UK financial services industry, institutions are gearing up for plans B and C.Seeking the necessary permissions and compliance via each individual Member State’s national regimes adds complexity and substantial costs for FinTech companies based in the UK. This is something that all FinTech companies would ideally like to avoid or circumvent. WATCH OUR WEBINAR ON DOING BUSINESS IN A POST-BREXIT EUROPE.In the last couple of years, the Baltic states (i.e., Latvia, Lithuania, and Estonia) have geared up and responded by implementing favorable regulatory frameworks for all FinTech institutions. With this FinTech focus and benefits stemming from the passporting rules, the Baltic states are slowly driving the industry and attracting all the major market players, including Revolut.In this series of articles, we outline the important practical considerations one needs to consider for each of the Baltic states; their regulatory advancements, licensing benefits, stock options, capital markets, and alternative financing mechanisms. These tools provide a beneficial and attractive environment for financial service institutions to either start out in life or continue growing their business.LATVIALatvia’s regulatory regime supporting FinTechsIn terms of numbers, one in five new Latvian startups belong to the Financial Technology sector.15The Latvian Financial and Capital Market Commission (“FCMC”) has made available the Innovation Hub and Regulatory Sandbox to any market player for professional support and consultancy services in relation to existing and upcoming regulation.16A good example of highlighting the FCMC’s readiness and competence to supervise the financial services industry is in relation to the upcoming EU crowdfunding rules. The European Parliament has recently adopted the Regulation on European Crowdfunding Service Providers (“ECSP”) for businesses.17 The ECSP is already in force and is applicable from 10 November 2021. The ECSP is binding in its entirety across the EU and will provide a new and comprehensive set-up for crowdfunding platforms to operate under. In Latvia, the FCMC has already begun working and consulting with companies establishing or established to correspond with the upcoming rules in the ECSP.Several of the largest European peer-to-peer marketplace platforms have originated in Latvia, such as Mintos and Twino, which are currently adapting to the recently adopted regulatorychanges, by either acquiring an investment firm license and/or electronic money institutions license.18E-money and payment licensesIn order to obtain a license to operate an electronic money institution or for the operation of a payment institution, the company must submit a complete application to the FCMC.Depending on the licensed activities, the minimum capital requirement for an EMI is EUR 350,000 and for PIs starting from around EUR 20,000 up to EUR 125,000.The FCMC shall take a decision on the issuance of a license or refusal to issue a license and inform the applicant within three months after receipt of all the necessary documents, as well as detailing the reasons in the event of a refusal. If all relevant documents are not submitted or submitted incomplete, the FCMC can prolong the duration for an additional three months, and therefore the licensing process can take up to 6 months (and as we have seen in practice, sometimes even longer).In the event, a FinTech company already holds the respective documentation for a UK-issued EMI or PI license, it could save time in adapting the documents and reduce the assessment period before the FCMC.For FinTechs who intend to provide innovative payment services, FCF reduces state fees for the examination of documents submitted for the respectively chosen license of either electronic money institutions or payment institutions. Following the registration or authorization, the annual charge is also set lower than average for the first three years.19 In other words, these instruments assist with limiting the financial burden (i.e., licensing and maintenance costs) at the early stage.Attractive employee stock optionsThe main demand for employee stock options originates from FinTechs and other start-ups, which attract strong and high-level candidates for skyrocketing their ideas into a profitable company with promising equity.Employee stock options, if developed thoughtfully, can attract employees for the long-term and set the ownerships’ mindset. Especially within the startup community, stock options are also used in cases when a company is not able to afford the increases in employees’ salaries at the time.At the beginning of 2021, the Latvian Personal Income Tax Law and Commercial Law brought about favorable changes. These changes expanded the possibilities to grant stock options not only to joint-stock companies but also to limited liability companies’ employees, board and supervisory board members, and other related companies’ employees.The minimum holding period has been reduced from 36 months to 12 months and in addition, it is possible to exercise the option within 6 months after employment is terminated without losing the tax exemption.Access to capital markets and alternative sources of financingThe FCMC has undertaken (until 31 December 2021) to create a development and support model enabling enterprises to prepare for their participation in the capital market in case of the issuance of shares and/or bonds.20Similar to Lithuania, Latvian SMEs can apply to reimburse the costs incurred by acquiring third-party advisory services necessary exclusively for the listing of shares and/or bonds.  Expanding into Latvia or any other Baltic country can be a challenging process, but we have the technology to make it a streamlined and much simpler journey.Explore Centuro Connect, a FREE business expansion platform tailored to businesses and industries of all types, with a bank of valuable information and guidance all on expanding your business to a choice of 100+ countries. There’s no risk, no hidden costs, and no endless documentation to fill out. Just a wealth of information and like-minded experts to help you throughout your international business expansion. Sign up today by clicking HERE.

Expanding into new and foreign markets is a complex enough undertaking without worrying about your technological systems. Since many nations in developing and emerging markets are still relatively immature technologically, companies need to know that their ICT can be relied upon to support their business, no matter what the industryEighty-one percent of companies consider technological progress the main factor of change for the next 5 years, while 50 percent of the world’s leading manufacturing companies invest in IT applications and infrastructure to help them be more flexible and agile. Technological change reshaping business growth and expansion will only intensify as artificial intelligence, advanced robotics, and cyber-physical systems take the digital revolution to another level. So it is to technology that companies must turn to help them overcome the challenges of expanding in new markets. Technology in its fullest understanding is the capability that leads to outcomes, whether tangible or intangible. For this to happen, typically, certain skills and procedures are required. Early advances in human history are closely associated with technological progress, specifically with the history of energy. Yet, it was the dawn of the printing press towards the end of the Middle Ages which spurred the Renaissance, and which eventually led to the first recognizable techno-economic revolution of the modern age. Better known as the Industrial Revolution, this era was characterized by the mechanization of the cotton industry and the construction of canals, waterways, waterwheels, and turnpike roads. Since then, certain key trends associated with technological progress became clear:The size and footprint of technologies continue to increase beyond imagination, proven by bigger container ships and airplanes, higher buildings and dam walls, and space-age scientific experiments like the International Space Station, the Square Kilometre Array (SKA), and the Large Hadron Collider. Technology also becomes smaller and increasingly manifests at nanoscale. Think about gene sequencing and its applications in the medical and agricultural industries;Every technology epoch is characterized by a different principle of operation. A sequence of capabilities can be conceived of, starting with manual effort, followed in sequence by fire, speech and art, mechanics, steam, electricity, internal combustion, electronics, mechatronics, and lately characterized by the convergence of neurotech, biotech, infotech and nanotech;Technology becomes more accurate and efficient. From the crude capabilities of stone tools to the pinpoint accuracy of a laser, of GPS navigation and digital capabilities in general, there is steady progress in accuracy and efficiency;Technology becomes increasingly complex, and understanding thereof less accessible to the layperson; andDue to the conflation of these characteristics, technology also becomes more expensive, yet more omnipresent.HOW TECHNOLOGY ENABLES GLOBAL EXPANSIONFuture-focused leaders, in conclusion, strife to become technology-fluid. This means they attend to the following priorities:They realize that technology is all-pervasive and powerful and that the current transition to robotics, artificial intelligence, and quantum computing requires them to render technology a top priority on their governance and oversight agendas;They actively pursue strategies to ensure that their technology assets have been sourced responsibly, that the workings thereof respect the privacy and dignity of all living things inasmuch as environmental health, and that once retired these technologies are fed back into the recycling streams representative of their industries;They evaluate technology and technology innovation proposals for their relevance, appropriateness, and functionality, with relevance interrogating immediacy of need and of utility value, with appropriateness interrogating fitness for purpose, and with functionality interrogating outcomes with efficiency and sustainability gains; andThey pursue Integrated Reporting in order to inform all stakeholders of their attention to detail, inclusive of technology impacts, and they remain conscious of immediate technology priorities, such as the need for digital governance, focusing on social media strategies, thorough data and privacy protection principles and practices, and exploration of data monetization strategies.The global solutions offered by technology can be exactly what your company needs to expand internationally and by choosing the right technology tools to power your global expansion, you’ll soon find the world is at your fingertips.Discover how our 20 years of experience in global markets can help your organization seamlessly integrate new locations into your infrastructure HERE 

The energy market in Japan has some of the biggest investment market potentials in the Asia Pacific region. Their robust grid infrastructure, renewable goals, and significant capacity demonstrate that additional value already exists. The ability to invest in renewable energy assets in Japan—and thus to contribute to the country’s energy transition—also presents a significant opportunity for long-term capital from around the globe.Notably, a recent study has shown that Japan can create 67,000 new jobs by investing in domestic renewable energy projects by 2030. This would be a positive step as countries seek to rebuild their economies in the wake of COVID-19—and potentially catalyze a movement toward investment-led growth.In the aftermath of the devastating March 2011 East Japan Earthquake and resulting nuclear crisis, the Japanese government was forced to radically overhaul its long-term energy strategy. Following the crisis, Japan made the unavoidable decision to shut down all of its 54 nuclear power plants (which prior to the Fukushima Daiichi meltdowns accounted for more than 30% of its power supply) and drag dozens of thermal plants out of mothballs to compensate. This sudden jump back to a dependence on fossil fuels may have been a big boost for “Big Energy” companies, but it represented a pronounced about-face from where Japan aspired to be in terms of clean energy. Fortunately, it also triggered a grassroots movement strongly in favor of safer, renewable energy technologies and vehemently opposed to any return to a reliance on nuclear power. It has taken nearly a decade for the government to come around, however it looks like 2021 could very well be the year that Japan truly earns its spot at number 12 on the 2019 “Environmental Performance Index,” right behind The Netherlands.While considered to be “on the greener side of green” when it comes to environmental policies, Japan’s long-term relationship with nuclear power has come with a considerable amount of risk, both from accidents and also considering the environmental impact of storing high-level radioactive waste in a country with very little space for storing anything. Enter the power of wind, which in parts of Europe has become one of the largest sources of clean energy. Wind power features none of the dangerous by-products of nuclear power, no flooding of villages or damming of rivers like needed for hydro, and better overall efficiency than solar. With the passing of the Marine Renewable Energy Utilization Act two years ago, Japan now has 120 offshore wind farm sites that are under development, with four locations in Akita, Aomori, Chiba, and Nagasaki prefectures fast-tracked for local approval and implementation.WHY EXPAND INTO JAPAN?At the vanguard of the wind projects are two Danish multinationals: Vestas and Orsted, each at the top of the charts globally in the production of wind turbines and offshore development. Leading the charge in Japan is the nacelle innovator Vestas, whose joint venture with Mitsubishi Heavy Industries (MHI) on the Akita-Noshiro project is currently powering the delivery of a total of 33 Vestas V117 turbines to the project site off of the Japan Sea coast. The expected combined output of 139 MW will be enough to power 130,000 homes, putting the project well ahead of any other offshore wind farm in Japan. Yokohama-machi in neighboring AomoriThe prefecture will soon be the host of a similar project, with nine V117 turbines and three of the less powerful V105 units on the delivery slate. But it is the massive Yurihonjo project (located just south of the Akita-Noshiro site) that is expected to dwarf all of the competition, with the installation of up to 90 turbines generating an output of more than 700 MW. And in the not-so-distant future is the rollout of a powerful new “supersized” turbine by MHI-Vestas. The next-gen turbine is said to be even more powerful than the V164/174, currently, the highest-capacity wind turbine ever made, and its deployment in the field is expected by the middle of this decade.It will be an uphill battle to make renewable energy in Japan a larger piece of the country’s power puzzle. Under current initiatives, the government expects to be able to source just 1.7% of its electricity from wind farms by 2030, and so any real impact must be linked to an equal or larger investment in hydro and solar and a much deeper look into the potential for harnessing geothermal energy sources in one of the most seismically active regions in the world. But clean energy proponents are hoping that the momentum generated by offshore wind projects will be the wind in Japan’s sails as the country charts a course for a new, non-nuclear energy future.As the world’s third-largest economy, Japan’s energy needs remain substantial. Nevertheless, the relative undersaturation of the market presents a clear long-term opportunity for private investors seeking to gain exposure not only to the growing capacity of domestic projects, but also to innovations across the cleantech, grid, and storage space. Building this exposure in Japan also enables foreign investors to potentially gain access to benefit from the lucrative links which Japanese corporate, financial, investment, government, and non-governmental bodies have cemented across the Asia-Pacific region.Keep checking back or follow us on LinkedIn, Facebook or Instagram to get notified about our latest posts. We’ll be adding more articles in the future relating to global expansion, energy, and relocation in Japan, so watch this space!Alternatively, get in touch to see how we can help you collaborate and do business in Japan.

Whether it’s Steve Jobs stepping out of his garage or Mark Zuckerberg expanding beyond his Harvard dorm room, every successful company reaches a point where it’s too big for where it started. As you look to expand your business beyond your home country or territory, there are vital steps to take to ensure a relatively easy landing.Local laws and regulations have to be understood and evaluated. An innocent mistake – like, for example, hiring misclassified employees – could lead to costly legal action, fines, and reputational damage, before your local team has even unpacked their suitcases.Before you enter a new country, make sure your team has familiarised itself with the basic entry – and exit – requirements of your target market.After you’ve completed your market assessment and weighed up your market entry options, you’ll need to start bringing in the necessary expertise. Who are those experts, and who needs a seat at your global expansion table?Cast your mind back to the earliest stages of your business, when you were first moving from an ambitious start-up (possibly even a one-person show) to growing concern. Your first new hire might have been someone who could correctly advise you on the appropriate tax structures and on regulatory compliance.HERE'S WHY YOU NEED TO HIRE LOCAL EXPERTISEGlobal expansion would require the same expertise, but on a local country basis. This team would assist your own newly landed team with managing local tax regulations and providing bespoke accounting solutions.Legal advice would be a necessary extension of that, and another key early “hire”. From navigating local laws and employment laws (which might be very different from what you’re accustomed to in your home jurisdiction) to managing visas and work permits for staff who’re relocating to set up your new satellite office, trusted legal support is of course absolutely essential.Less obvious, but no less important, benefits of in-country legal support include conducting risk analysis and crisis management. Then, as the business establishes itself in its new territory, property – either renting or buying – would become the next problem to be solved.Recruitment, payroll, outsourcing… Global expansion support would also cover HR services, which can vary dramatically from country to country. Country-compliant HR processes would also have to be set up and implemented, as would the necessary cross-border banking solutions.Many companies make the mistake of entering a new market without hiring any local team members. Local people have unique, invaluable insights into local customs, cultural standards, and employee expectations, which can only come from having lived and worked in that particular market.The key driver behind global expansion is, of course, the potential to grow your company’s brand and profitability. It can also serve as protection against the risk of decline in your domestic markets. The trick lies in getting it right – and to do that, you’ll need to call on in-country expertise.Our Centuro Connect Platform provides end-to-end assistance through the complexities of global expansion, activating the local business ecosystem to provide a clear roadmap of actionable solutions. You can sign up today to try it out! There’s no risk, no hidden costs, and no endless documentation to fill out. Just a wealth of information and like-minded experts to help you throughout your international business expansion. 

As COVID-19 swept the globe, many countries adopted a shelter-in-place approach, hoping to contain the pandemic through local, regional or national lockdowns. Borders have closed, and the idea of immigration – let alone an overseas vacation – has been shelved indefinitely.Or has it? Life and business go on, and while remote working remains the default for some organisations, others are unable to wait for ‘normal’ travel patterns to fully return before relocating groups or individual employees.Relocation and immigration, which are high-stress but low-risk activities under normal circumstances, take on an added layer of complexity during a pandemic. This places added pressure on employers, whose duty of care to employees extends to their health and safety when relocating for work purposes, forcing HR specialists to consider rapidly changing regulations on top of existing transborder legislation. Non compliance of the rules could inevitably have a serious impact on the company as well as the individual.For example, when it comes to speed of deployment, companies may be forced to initially send someone into a new country with a business visa rather than a work permit for the sake of expediency, without realising the implications that a pandemic has imposed on travellers such as mandatory quarantine and negative Covid tests before they are permitted to enter. In such circumstances it would be the employer’s responsibility to ensure their assignee is briefed in advance without having to deal with the stress of added border checks being introduced globally.Regulations around immigration requirements as well as eligibility are changing rapidly, with entry restrictions often announced without notice. Individuals cannot be expected to keep track of the changes; instead, businesses should work closely with their internal legal teams, or external suppliers and develop internal policies and introduce regular communications keeping all stakeholders up to date.As vaccine rollouts began in early 2021 there was widespread concern about ‘vaccine passports’, which would either facilitate entry or enable immigrants to skip quarantine protocols when arriving in a new country. Several governments (and even some airlines) now require digital travel passes to help passengers manage their travel plans.None of that will be new to frequent travellers, who for years have had to provide ‘yellow cards’ as proof of vaccination against diseases like yellow fever and cholera. However, the rules will vary depending on the immigrant’s destination or country of origin, on their potential exposure to specific strains of the COVID-19 virus, and on the exact vaccine they have received. Again, it’s essential that those bases are covered to ensure a smooth process and business continuity.Many national governments have demonstrated a level of leniency and flexibility when dealing with the pandemic, but as the world heads towards a new normal it has become critical for companies to review their internal practices and introduce new measures that tackle the requirements for the future of international assignments. Given the significant overhaul of the requirements for travel, it would be prudent to review insurance and medical policies and introduce contingency planning to tackle the unforeseeable, thereby equipping your employees with the information and support they need for safer assignments.In addition to the safety requirements, employers will also be dealing with remote working locations and tax liability for both the individual and business. The earlier a company prepares and considers all the moving parts of a future assignment and factors in the cost implications to the business for Covid testing, health insurance and emergency measures, the more rewarding the experience for the employee in question.In short, HR departments need to undertake more strategic decision making with the buy in from senior management to ensure their assignment programs can run smoothly in the future. It will be interesting to see how assignments will be structured going forward with more options for employees to choose their desired location for remote working anywhere in the world.

In some countries, cars drive on the left. In others, cars drive on the right. In some countries most people ride bikes or scooters; and in some parts of some major cities, cars aren’t allowed to drive at all. Employment law is no different. While some employment regulations are universal, others have local variations that create complexities for businesses looking to expand into new jurisdictions.The International Labour Organization (ILO) sets universal labour law standards, which individual countries ratify (sign up for) and enforce as part of their domestic laws. But there are nuances to many local laws which must be understood and accounted for, to ensure your business doesn’t miss out on recruiting the people it needs, and that it doesn’t waste money on avoidable fines or criminal sanctions.The recruitment process is often a puzzle for globally growing businesses. Some countries require a local entity to be set up to hire local employees, while in others the parent company can work directly with local hires. Many – but not all – countries require written employee contracts to be in place, setting out the employer’s and employee’s obligations. (In some jurisdictions, like Belgium and Saudi Arabia, those contracts are only enforceable if they’ve been translated into the local language accurately.) Likewise, many – but again not all – countries have a minimum wage and overtime requirements in place; and while this does not apply to white-collar hires, it may well apply to your blue-collar staff or independent contractors.Implementing country-compliant processes is absolutely essential. Take the Saudi Arabian example: there, all part-time workers must have a contract that states an official termination date, and part time-contracts can only be renewed once. Foreign workers must have a fixed-term contract and are ineligible for part-time work. Probation periods should be explicitly stated in contracts and normally run for three months, although they can be extended to six months by written agreement.The in-country specifics only get more complex from there. The maximum working time for employees working in Saudi Arabia is eight hours a day or 48 hours a week. This can vary in the event of shift work, but only if those limits are not breached over a three-week rolling average. Those limits are then reduced during Ramadan to six hours a day and 36 hours a week.Now compare that to Singapore, for example. According to the local Employment Act, every contract of service must include the designation title and job scope, hours of work, probation clause, remuneration package, employee benefits, code of conduct and termination. Companies that fail to comply with any aspect of this Employment Act can face severe fines and possible jail time. In Singapore, the maximum working hours are eight hours a day, 44 hours a week, and no more than six consecutive hours without a break. Employees cannot work more than 12 hours a day, including overtime.Some countries (like France, Italy and Brazil) require employees to “unionise”, or join in industry-specific collective bargaining agreements.; and almost every country on the planet requires employers to set up payroll and redirect the applicable income tax and employee benefits (healthcare, pensions, unemployment insurance, etc) to the relevant authorities. This can be a significant cost, which may be best outsourced to a specialist payroll provider, at least at the start.If hiring is a maze, then firing can be a minefield. The grounds for legally terminating employment vary dramatically from country to country, or even in different regions within a single country. Some countries (including, famously, the United States) have “at-will” employment, which allows employers to fire staff as and when they please. Try that in other most countries, and you’ll face a short and expensive trip to the labour courts. There, terminations must follow a fair process and must be based on reasonable grounds, like poor performance (which has to be documented), redundancy (which often requires firmer grounds than simply a desire to restructure that one role) or gross misconduct (which again has to be documented and proven).The rules get more complicated as your business grows. In Japan, for example, you’re required to document work rules in an employee handbook once you’ve grown to 10 employees; in France, that’s required at 20 employees, while in Belgium it’s mandatory for just one.As with so many aspects of global expansion, the secret to success lies in knowing the lay of the land and planning ahead. Your first engagement, then, might not be an in-country employee, but rather a local “fixer” who can help you navigate the intricacies of domestic labour law.

IntroductionOn 18th February 2021, the Brazilian Supreme Court (“STF”) ended a dispute of many years and ruled that Municipal Service Tax (“ISS”) is the correct tax to be levied on software transactions, especially in respect of software licensing and use assignment transactions.What does this mean?Such a decision changed the prevailing case law regarding the matter and impacts IT companies all over the country since they had been waiting for a final decision to be rendered to have legal certainty on how to conduct their activities.In short, Municipalities will only be authorized to charge retroactively the cases in which no tax has been collected. Additionally, taxpayers may only apply for a refund of the ICMS amount to States in the cases where the payment of both taxes has been effected.ConclusionUnder this new scenario, IT companies will no longer need to enrol with the State Tax Authority at the time of their incorporation, a requirement that had been triggered automatically by the State Authority at that stage, and which also required the need for physical and segregated premises.Therefore, the judgment will not only produce a lower tax burden for the technology sector but will also bring less complexity to the company's operations.

How can businesses grow beyond restrictions imposed by COVID-19?In a world where an enterprise is still held hostage by pandemic restraints, international growth might seem an impossible endeavour.Certainly, organic growth has been challenging in these times. The challenges posed by business internationalisation are more complex than ever, due to restrictions on travel, conducting due diligence and establishing operational collateral in foreign geographies. In tandem, the pandemic shook the foundations of every international market, upheaving long-founded supply chains and regulations for expanding businesses.Above all, the impact of the global health crisis exposed vulnerabilities in the way business mitigate social and economic threats; particularly those caused by conventional framings of development and global growth. According to a KPMG white paper, the companies that could not sustain operations throughout the pandemic were those that failed to ‘seize opportunities offered by digital or hybrid solutions. The KPMG analysts advise executives to look beyond conventional means of survival:‘Companies need to shift their focus to new opportunities. Companies on the lookout for emerging opportunities early on may find opportunities to create added value’COVID-19 proved the need for organisations to outgrow existing operational fragilities, and to go digital. Several long-standing organisations that failed to adopt next-generation capacities faltered under pandemic pressure. They faced barriers that could have otherwise been avoided by more interconnected approaches.In light of last year’s events, businesses need to pre-empt the success of newer approaches to internationalisation. Nominally, they need to consider the benefits of hybrid service offerings and product platforms that will ease the expansion progress for them.Zain Ali, CEO of global expansion company Centuro Global, believes that businesses will succeed by adhering to platform-based approaches to internationalisation. He identifies the trends and potential roadblocks that expanding organisations might face in the short and long-term, and how expansion solutions like Centuro Global’s ‘Go Global’ and ‘Centuro Connect’ offerings could remediate these bottlenecks.Read The Full Conversation Here.