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Many Potential Taxes, But Chances for Negotiation

There are many taxes to consider when locating an operation overseas, but they also present opportunities to negotiate lower rates.

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Assessing Emerging Markets for Cross-Border Location Strategies

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Assessing Emerging Markets for Cross-Border Location Strategies

What taxes and/or incentives should U.S. companies be aware of that apply solely to moving some operations overseas?

Matt Highfield, Senior Vice President, Strategic Consulting, Jones Lang LaSalle

There are many tax considerations associated with the establishment of a new project and with ongoing operations overseas (both in the U.S. on the parent company and in the host country). The more notable taxes incurred for manufacturing operations include income tax, sales and use taxes (sales, GST, VAT, ICMS, etc.), and property tax. Many others apply.

There are typically a long list of fees that may apply to projects that also require research. Some examples include site maintenance fees, utility connection fees, permitting fees, construction fees, and import duties. It is important to understand such taxes and charges to refine the financial estimates of a project cost, but to also establish a foundation for the development of a negotiation strategy. It is often possible to obtain reductions, subsidies, refunds, rebates, or exemptions from many potential costs incurred by a project if negotiations are approached strategically.

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About the Author

Matt Highfield, Senior Vice President, Strategic Consulting, Jones Lang LaSalle
Matt Highfield brings more than 12 years of management consulting experience advising large corporate clients on global location strategy and platform optimization. Previously a Managing Principal with Cushman & Wakefield’s Global Business Consulting Practice, Highfield focused on the development of competitively sustainable global business platforms and the selection of locations synergistic with corporate cost and quality goals. In doing so he conducted detailed field evaluations of complex emerging markets, developed redeployment strategies and business case scenarios, performed inspections and qualifications of sites and facilities, and negotiated real estate and economic development incentives. He received a bachelor’s degree from Macalester College in St. Paul, Minn and a master’s degree from University of North Carolina at Charlotte.

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