On Thursday, April Family Business Radio hosts Meredith Moore and Pat Romboletti were happy to welcome this week’s guests—Erick Papp, international executive for 28 years, and Richard Bennett, business and corporate law attorney with Kitchens Kelley Gaynes, PC.
The big take-away from this week’s discussion was that the seemingly treacherous waters of global business begins and ends with one’s own assumptions about the way things should be. Before venturing onto the global stage, you really need to be open to different, sometimes radically different, perspectives.
This insight first emerged when Erick talked about his stint in Ecuador as the manager of a banana plantation. In this capacity, he was actually responsible for a broad range of duties, across all functions, so that he was, in fact, fulfilling the role of what we would call in the States a CEO/COO. As Richard quickly pointed out, in different countries, titles mean different things, something that is true of a whole host of concepts. It is the wise business owner who scopes out as many of these differences as possible—and continues to stay alert to learning the local customs along the way.
Erick and Richard also discussed tax issues as relates to international business. Erick began by pointing out the big similarity—that is, all governments try to take as much money in taxes as they can. Sad, but true, across all cultures and countries. From there, though, taxation morphs into a thousand variations. For instance, in Ecuador, a manager is personally and legally liable for any discrepancies in the company’s taxes. Also, taxes are paid in advance in Ecuador.
Between the two of them, our guests developed a quick list of questions for business owners to address—before opening shop outside the U.S.:
• Does it make sense to expand internationally?
• If so, how is the best way to accomplish that?
• Should the expansion be done in large leaps or baby steps?
• What is the best way to structure the international business—as a subsidiary, joint venture, co-owned subsidiary, etc.? Is local ownership required?
• Who are the trusted advisors, both domestic and international, that are needed to help with the expansion?
As always, the complete podcast, including tips from our pros, is available as a download. Please take advantage of our guests’ expertise and knowledge in this exciting area of international trade and manufacturing. Especially as relates to this last bit of wisdom: The behavior of people in another culture may not—probably won’t—conform to your expectations.