Business briefing series

20 issues for businesses expanding internationally

At Ernst & Young, we understand the challenges and we know what it takes to drive sustainable growth because we’ve helped many of the world’s most dynamic and ambitious companies develop into market leaders. Our global network of Strategic Grow th Markets professionals are dedicated to serving the changing needs of fast-growth companies. Whether working with dynamic companies or early stage venturemid-cap backed businesses, our professionals around the world draw upon extensive experience, insight and global their resources growing businesses reach their full to help potential. As well as providing traditional assurance, advisory, tax transaction advisory ser vices, our professionals and work you to reduce the complexity of legislation, help with align tax strategy with your business goals, expand into your new markets and pursue mergers, acquisitions or other strategy transactions to take your business to the next level. We can provide guidance around how to manage and control your so that you can approach the future with risks, confidence. So whether your business thri ves on entrepreneurial or superior customer service – spirit, innovation and regardless of your stage of grow th – our Strategic Growth team can help you take the next step. It’s Markets not luck that makes leaders. Ernst & Young is a global leader in assurance, tax, transaction ser vices. Worldwide, our 144,000 p eople and advisory are united by our shared values and an unwavering commitment make a difference by helping our people, to quality. We our clients and our wider communities achieve their potential. Ernst & Young refers to the glob al organization of member Ernst & Young Global Limited, each of which firms of is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organisation, please visi www.ey.co t m

The Institute of Chartered Accountants in Australia (the Institute) is the professional body representing Chartered Accountants in Australia. Our reach extends to more than 66,000 of today’s and tomorrow’sleaders, representing some 54,000 business Chartered Accountants and 12,000 of Australia’s best accountingwho are currently enrolled in our worldgraduates class postgraduate program. Our members work in di verse roles across commerce and industry, academia, government and public throughout Australia and in 109 practice countries world. We aim to lead the profession around the by delivering visionary thought leadership projects, setting the benchmark for the highest ethical, professional and educational standards, and enhancing and promoting the Chartered Accountants brand. We also represent the interests of members in government, industr y, academia and the general public by actively engaging our membership and local and international bodies on public policy, government and regulatory legisl ation issues. The Institute can leverag e advantages for its members as a founding member of the Global Accounting Alliance (GAA), an international accounting coalition the world’s premier accounting bodies. formed by The has a membership of over 800,000 and GAA promotes professional services to share quality information and collaborate on international accounting issues. The Institute is constituted by Royal Charter and was established in 1928. For fur ther information about the Institute visit charteredaccountants.com. au

Disclaime r This discussion paper p resents the op inions and comments of the author and not necessarily those of Ernst & You ng, the Institute of Chartered Accountants in Australia (the Institute), or their memb ers. The contents are for general information only. They are not intended as professional advice for that you should consult a Chartered Accountant or other suitably qualified p rofession al. Ernst & Young and the Institute expressly disclaims all liability for any loss or d amage arising from reliance upon any information contained in this paper. © Ernst & Young Australia and the Institute of Chartered Accountants in Australia 2010. All rights reserved.

All information is current as at October 2010 First p ublished Octob er 2010 This communication provides general information which is current as at the time of production. Published by: The Institute of Chartered Accountants in Australia Address: 33 Erskine Street, Sydney, NSW 2000 Ernst & Young Address: Ernst & Young Centre, 680 George Street, Sydney Busin ess briefing series: 20 issues for businesses expan ding internationally First edition ISBN: 978-1-921245 -62-6

AB N 5 0 0 8 4 6 4 2 5 71

Th e I n sti tu t e o f C h ar te re d A cc o u n ta n ts i n Au s tr al ia I n co r p o ra te d in A u st ra li a M e mb e rs’ L i ab i l it y L im it ed . 0 9 10 - 3 7

ABN 75 288 172 749 Ern st & Young.

such a move could also prove costly if not done very correctly.Business briefing series 20 issues for businesses expanding internationally Anyone who has made the bold step of starting their own business has at some stage dreamed about taking that business of fshore in a bid for increased expansion and to generate additional revenue. Each of the three sections contains a series of pull-out boxes which guide the reader as to the types of questions that they should be asking with regard to the business. Business briefing: 20 issues for business es expanding internationally has been written and presented in such a way as to maximise the reader’s understanding of the issues. in conjunction with Ernst & Young (EY) has produced this thought leadership paper Business briefing: entitled for businesses expanding internationally 2 0 issues . Michael Spinks FCA President Institute of Chartered Australia Accountants in B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 3 . Although ambitious and potentially very lucrative. the Institute of Chartered Account ants in Australia (the Institute). I trust that you will find this thought leadership paper interesting and worthwhile reading. The to help commentary is divided into three key phases of an international expansion in the report project: • Planning for • expansionyour location Choosing • Conducting business overseas. To assist business leaders with the process of taking on globalisation. T he publication is the third part of the Institute’s Business Briefing series designed businesses to successfully navigate challenging issues. These questions are consolidated into a detachable checklist at back of the publication which can be used when consulting the the paper.

4 B u s in es s b ri ef in g s er ies :0 i s s u es for b u s in es s e s e xp an di n g in te rna tio n al ly 2 .

.............. ......... management 20........... .. Supply chain...... 2........ Global management ....................................... Strategy ............................. ............................... .......................... ...... Global trends 3.............................................................................. ......... environment 6......... .. ............................................. property 19................ ....................................................................................... incentives 8. .......................................... t Contact details . transfer pricing and intellectual ........................................................ expansion 1........ ........ Market .........Contents Introductio .. Legal system ........................................ ..... Implementing the operating ............ ............................. ...................................................... Location and ... location 4... Local tax and regulatory ........................ structure 15........ Foreign exchange management and currency risk ...................... taxation 18............................................................................................. Global human resources ......................................... 6 8 8 8 9 10 10 11 12 12 13 13 14 15 15 16 17 18 18 18 19 19 20 20 21 Back cover Choosing the .... Financing 14.... ..... ............ Cultural ......... Innovation and ......... ........ structure 16........ ................. climate 5......................... ....... overseas 11.................................................................................................... ........................ n Planning for .................................................................................... infrastructure 9.. Local workforce ...................................................................................... research .................................. ................................................................. Risk ............................ Business and international . Political and social ... considerations 13.......... ....... B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 5 .......................................................................... compatibility 10.. Choosing the operating ........................................................ ........ Checklis ....................................... team 12................................................................................down .......................................... 7.................................... Exit or wind.............. .......................... /controls 17........................................................ .................................................... Doing business ............................................................ ....................................................................................................... .......................

Benefits for international companies from globalisation In which of the following ways has globalisation impact on your business over had a positive the past three years? 86% Overall growth 53% 68% 80% Profitability 32% 35% 5 1% Access to materials 27% 39% 42% What proportion of your company’s revenues is derived from its overseas operations (i. profitability. d ue t o ro un di ng . access to human resources. outside your company’s home market) currently.Introduction In August 2010. Only one in 50 executives surveyed believes containing their operations within their home country or earning 10% of their revenue from overseas markets less than by 2012. The survey was conducted in August 2009. Throughout the global financial crisis. 38% of respondents they currently derive over half of indicated that their revenue from overseas operations. with 520 senior executives worldwide. The Globalization Index 1 supports many market that the trend towardsindicators ambitious international expansion will continue. Very few Australian organisations can afford to ignore this growth momentum. is a report written by Ernst & Youn g with th e Economist Intelligence Unit. This speed of expansion may indicate the strong desire by companies to be the first-to-market and/or the imperative to capitalise on new market developments. As indicated in the below. and the ability to innovate. The Globalization Index 20 09 released in January 2011. and it is closing the gap on the United States. agile organisations continued their quest to participate in and prosper from the tremendous growth in the emerging markets. Regardless of the size of their international footprint. by 2012 more than half of the respondents chart expect this to be the case. China overtook Japan as the second largest economy in the world. nor the other benefits that can be achieved from investing in emerging and international markets. 1. with one in four respondents expecting to derive more than three quarters of their revenue from overseas. access to materials. and in three years time? Access to human resources 27% 21% 27 % * Ability to innovate 33% 31% 30% 27% 29% Now Three years time 13 10 17 23 20 18 Investmen opportunities t 16% Proportion of revenue from international clients: 25 – 75% 10 – 24% 0 – 9% 2 7 15 21 2 8 26 Access to finance 2 0% 15 % 0 % 1 00 % Proportion of revenue: 0 – 9% 10 – 14% 15 – 24% 25 – 49% 50 – 75% Over 75% Sou rc e: T he Glo bal iz ati on I nd ex S ur ve y 2 00 9 Sou rc e: T he Glo bali zat i on I nd ex S urv ey 20 09 * Fi gu res m ay no t ad d up t o e x act l y 10 0% . the research identified the top five drivers for businesses expanding internationally as overall growth opportunities. The 2010 edition of the report is expected to be 6 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . to be a viable option.e. This research depicts a global landscape organisations where execute their international expansion strategies at a rapid pace. driven by globalisation. The world is changing at a fast pace.

supply chain and intellectual propert y risk management issues are also looked at and in more detail. The planning phase is vital to avoid wasting resources in assessing investment locations that should never have considered in the first place. The diagram above depicts the import ance of funnelling your ef forts to ensure the bulk of your energy and resources are spent setting up successful The first two phases focus on identif ying operations. common country themes identified that can be applied regardless of have been your target location. cultural compatibility and the local workforce. the 20 iss ues for businesses expanding internationally . potential locations and selecting the most appropriate for your operations. the legal system. Agile organisations will go through the process described above at regular intervals. An existing global managementmake it easier to set up your footprint team would in a foreign location. Would your management team how to deal with a request by a high know ranking asking for a facilitation fee? Does your global official workforce need security protection in addition to other incentive payments? Will your business be funded intercompany loan or do you need to by an consider more innovative funding arrangements such as Islamic Will you acquire an existing local business finance? to reach a certain market share quickly? Foreign exchange management and currency risk/controls. focuses on the core issues that you should consider when formulating and executing your international expansion strategy. These issues are looked at from a strategic point of view rather than a country specific angle. Whilst for example legal systems examined in any detail. broader brand and perfect reputation issues must be considered. This may make commercial sense. Planning for expansion 2. however. business and international tax. In the ‘planning for expansion’ section we examine the importance of a clearly defined strategy. we raise the are not question your business is equipped to deal with a legal whether system based on civil or Muslim law. The commentary in this report is divided into the three phases of an international expansion key project: 1. The last section deals with issues associated with doing business overseas. we consider exit and wind down issues. Conducting business overseas. the local tax and regulatory environment. innovation B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 7 . if you have become an important employer in a particular region your exit must be carefully planned country or to mitigate social backlash. been The detailed assessment under the major heading your location’ involves looking at ‘choosing the political and social climate. however. For example.This report. It does not provide specific analysis. Based on the findings they decide to wind down operations in one may location and commence operations in another. The funnel planning Planning expansion Choosing location Doing business oversea s for the and incentives. location and infrastructure. Finally. global trends driven by changing demographics and market research. Choosing your location 3.

In countries such as China and India. Australia’s population is estim ated to grow to 36 million by 2050. more Before expanding internationally. To put this into perspective. you should have a clear picture of what you are trying to achieve. An example of this is Vietnam. more cost ef fective production. international also an opportunity to help strengthen expansion is your business at home in the medium to long term. or you can watch others fill space. the middle traditional characterisation and perception of emerging markets as predominantly low cost manufacturing centres is quickly changing. new markets. The implications for your business are clear. World population growth is not a new phenomenon. however it is the demographic World Investment Report 2010 United Nations Conference on Trade and Development ‘Global foreign direct investment witnessed a odest. Therefore. joint the venture. that is equivalent to the bi-monthly combined population growth of China and India. those organisations that do not stress test the financial and operational impact on their existing business. market leading talent. a partnership or a green field development? Ensure you test your assumptions and have a clear understanding of how long it will take to turn a profit. population growth is accompanied by increasing affluence and a growing class consumer base. Will you enter identified market(s) through acquisition. management time and human resources. Developing and transition ec onomies now absorb more than half of global FDI. 2. Similarly. Emerging markets are also becoming strong consumer driven societies where the demand for products and services is increasing faster than in more established and mature markets. particularly in relation to demographic changes. Those business leaders that do not that act watching others reap the benefits and may risk be challenged when those first-movers turn their attention to Australia. However. Seen from this perspective.Planning for expansion 1. but uneven recovery in the first half m of 2010. Strategy Clearly define and stress test your strategy What are the implications of international expansion existing business operations? for your Very few organisations can afford to ignore the increasing trend towards globalisation.’ 8 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . may lose than their dream of becoming a global player. You can become a participant in these markets and tap into ever increasing consumer base to help an secure your future profitability. changes that arise from this growth that will af fect business practices and profit ability in the future. more Vietnam is currently attracting significant FDI in certain industry sectors. The flow of foreign direct investment (FDI) into a country is an important indicator of the economic viability of location. demographic trends such as that the and education profile of the population may also age indicate future economic vitality and the growth of a consumer base. Are you searching for a new and cheaper source of capital. Entrepreneurial are the first to move often have organisations that the most startling success stories. or all of the above? Can you execute your strategy alone or do you need strong partners both from an advisory as well as a business perspective? You should consider the pressure global expansion may on your domestic operations in terms of have finance. trends Global Is your organisation exposed to new and emerging markets? Has the composition of your major competitors changed? Is foreign direct investment in your industry clustered in locations where you sector do have a presence? not It is important to monitor and to be aware of global trends. wherethan 70% of the population is 30 years or younger.

tap into existing networks. Reliable statistical data or reference material can supplement but should not replace a field trip. there are numerous resources available free of however charge to help you uncover useful information about the strengths and challenges of global markets. Much of research can be done from your home base and this will you in generating a short list of potential help locations for expansion. What may have been a good investment location historically. B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 9 . visit your t arget visit trade locations and meet the local people. fairs. talk to your advisors. Tap into existing via chambers of industry and commerce networks or other organisations representing an investment location.3. may not present the same opportunities in the future. talk to your advisors and visit your short listed locations. Market research What research is available to provide you with information on market and industry conditions? Is this information up-to-date and what is the future outlook? Create a short list of new and emerging markets. The world is moving and changing fast. This will greatly you to make an educated and informed assist decision about whether that market is right for your business. Market research is very important but can be costly.

Which of the following asser tions about the impact of protectionism in coming years most closely reflects your view? (% who agree with each statement) M a jor e c on omie s wi ll a do pt l imi t e d p r ot e c t io nis t me a s ur e s in c e r t a in k ey s ec to r s G l oba l ma r k e t s w i ll r e ma in or be c ome m or e o pe n a s g ov e r nme n t s t r y t o r e s t or e e c ono mic gr ow t h Do mes t ic p ol it ica l ex p edie ncy w il l ov e r r id e c l a ims b y w or ld le a d e r s t o r e si s t pr o te c t ion is m ‘ Ti t . The response to the global financial crisis at with stimulus programs around the globe illustrated this.Choosing the location 4. regulations and trade issues. Political climate and social Is the political system stable? How do you assess sovereign risk? Does the country suffer under high levels of sovereign debt? Is there likely to be social unrest or are workers organised in powerful unions? The pace of change of the global political landscape is accelerating due to globalisation. the burden of sovereign debt may force a country to abandon business friendly programs. Ensure take note of any early signs of social that you unrest.fo r. Political decisions in one country may have far reaching implications for trading partners or the globalised business communit y large. including the potential for social unrest or regional instability is relevant for determining the risk of potential investment.t a t ‘ p r ot ec t i onis m w i ll t r igg e r a da ng e r ou s do wn wa r d s pi r a l in glo ba l t r a de Th e w or ld e c o nomy w ill r e p e a t t he pr ot e c t i oni st e r r or s o f t he 1930 s An assessment of your target location’s political environment. you should evaluate based on the future outlook for the country or the risk the region. as the graph below illustrates. not just the status quo or historic events. which of the following would you consider to be the most important government relatedfactors? Po lit i c a l st a b il it y Ma c r o ec ono mic st a b il it y Cu r r enc y st a b il it y Ho s t go ve r nme nt su pp or t f or i nw a r d f o r e ign i nv e s t me nt H os t go v e r nme n t a t t it u de t ow a r ds dome st i c e nt e r p r is e s C or p or a t e a n d o t he r r e l e v a nt t a x e s C la r i t y a nd pr edic t a b il it y o f t he le g a l s y s t e m S t r e ngt h a nd f a ir n e s s of le g a l s y s t e m Ri s k of n a t ion a lis a t i on or ex prop riat io n 0% 20% 4 0% 6 0% Dev elo pe d Em er gi n g So u rc e: T h e G lob ali zat i on I nde x S urv ey 20 09 D on’ t k no w 0% 10 % 2 0% 3 0% 40 % 50 % So u rce : T h e Gl ob aliz at io n In dex Su rv ey 20 09 10 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . the graph below illustrates the importance investors place on political stability in assessing emerging market locations. governments appreciate that globalisation is Most the motor of economic expansion. More than 5 0% of Globalization Index respondents believe that major economies will adopt protectionist measures in certain key limited sectors. This has been an any important South East Asia. Before entering a new market. Almost 60% of respondents rated political stability as the most impor tant government-related factor to consider when deploying FDI. where various issue in countries affected by social unrest in recent have been years. Furthermore. concerns are now emerging about new protectionism. However. If you were to plan a foreign direct investment in developed or emerging markets over the next year. To support this.

against foreign Legal systems around the world Ci vi l L aw Co mmo n L aw Mu sl im L aw Cu sto ma ry L a w Mi xe d Sy ste m S o ur ce: Leg a l s y s te ms a r oun d t he w or l d. the 2009 Executive Global and the B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 11 . factors withholding taxes and consumption taxes such as a value added tax (VAT). Your market analysis should commercial discussions with a local include market tax expert taking into account your specific facts and circumstances where possible. arbitration around transfer pricing. Ernst & Young Passport (in cludes the 2010 Worldwide Corp orate Tax Guide 2009 Transfer Pricing Glob al Reference Guide ) . through subsidies or other forms of foreign protection. the 2010 VAT Guide . U ni v er s it y o f O t t a w a : ww w. this can also be deceptive due to many including the existence of state based taxes. permanent establishment issuesglobal work force. if it can strike the right balance between a secure environment for effective creating corporate governance across all industry sectors. Free trade agreements generally indicate an open and investment friendly economy. p h p 2. ca /e ng / i nd ex. without stifling entrepreneurial freedom or discriminating investors. their existence 2 does not rule out the possibility of government support for certain industries to protect domestic markets against competition. however it is necessary to look beyond withholding tax rates and test how the treatieswith mutual agreement procedures and deal . Not all double tax treaties are and a the same and some countries may try to assert taxing beyond what investors would ordinarily rights expect under OECD guidelines. However. An extensive double tax treaty network may likewise look impressive. A country’s regulatory framework will be considered open to FDI. Local tax and regulatory environment Is the tax regime business friendly and/or competitive ? Does the country have free trade agreements or double tax treaties? Does the regulatory regime set the scene for a sound corporate governance framework? A low headline corporate t ax rate is always appealing However. ju ri g lo b e.5.

while Muslim and in law be encountered when doing business in the may Gulf the Middle East and parts of Africa and Asia. arbitration or mediation • It will provide guidance with respect toinformation • Ltechnology abour law will regulate employment matters • There is real estate. the decision to relocate research and development activities to an emerging market will be influenced by a number of strategic and business drivers. Should you have a presence at global innovation clusters? Are generous grants and incentives available for innovative organisations? Maintaining an environment that supports innovation for future business growth. 12 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . Legal system the (continu ed) 7. A common law legal system can be a huge advantage be much more likely to understand as you will the framework and outcomes. States. The map on page 11 shows however that the number of countries with a pure common law system is limited. are you sure you understand the outcomes? Do the laws and the legal and judicial system provide support for and protection of commercial activities? An effective legal system that provides a balance between protecting the commercial interests of business. The legal system will af fect every aspect of your international expansion. organisations with a centralised strategy are just about as likely as thosea decentralised approach to regard it as essential with to apply innovative ideas from local markets. can provide you with a level of confidence that you can legally enforce your commercial agreements. planning and construction law to consider. or decentralised and driven locally. Innovation is critical can centralised. whilst also protecting the consumer. For example: • It will affect merger and acquisition activit y itself and will set boundaries through antitrust competition or law • It will be instrumental for the protection of trademarks. commercial design or plant innovations (including copyright or distribution law. data protection and privacy) • It will set the scene for litigation. Civil law is the prevailing system in much of Europe many of the emerging markets. be As demonstrated in the chart below. Conducting research in emerging and fast growth can drive new ideas by tapping into a new pool markets of innovative and market leading talent. These may include using the target location as strategic hub for market expansion into that a region. Innovation and incentives Should you develop your emerging or fast growth markets? products in Is it a common law system? If not. Innovation is critical to growth whether centrally or locally drivenrate your agreement with the following Please statement innovation activities within your regarding business Ma i nt a in ing a n env ir o nmen t w he r e pe op le c a n be i nno v a ti v e i s c r i t ic a l t o f u t ur e b us in e ss gr ow t h We a da p t pr o duc t s an d se r v ic e s to t he ne e d s of loc a l ma r k e t s W e b e li e ve pr o c e s s inn ov a t ion i s a s imp or t a n t a s pr od uc t i nno v a ti on A p pl y ing in nov a t i on ide as f r om lo c a l m a r ke ts is e s s e nt i a l W e c r e a t e pr od uc t a n d se r v ic e s s pe c i fic a ll y f or loc a l ma r k e t s 36% 49% 44% 52% 48% 67% 5 8% 61 % 65% 6 8% In nov a t i on c ent r a l is ed in he a dqu a r t er s In nov a t i on dec ent r a li se d t o lo c a l ma r k et s Sou rc e: T he Glo bal iza ti on I nd ex S ur ve y 20 0 9 For many businesses.Choosing location 6.

sweeten the deal for many organisations In addition to any formal programs. never their w but ives . This can generate a competitive disadvantage as the management team will be required to make rapid decisions. depending on the circumstances and nature of the investment. This ensures that an effectivecan be developed that places your organisation strategy in a strong bargaining position. Without early at tention to these issues. It is also acceptable your host’s children. of potential considerations such as the target location’s size and accessibility. F o rb es: ww w. ability will be heavily dependent on accessing adequate social and commercial infrastructure.c om / i d / 35 9 8 60 24 / 3. and also data delivery mechanisms such as fibre optic cable and broadband internet. Particular attention should be paid to the target country’s communications infrastructure. In Latin America. In most jurisdictions. however. access to financial services and other factors. Cultural compatibilit y Are there significant cultural differences that may impact the way you conduct your business? Are there likely to be language barriers? 8. and among Musli m hosts i n Asia. and always it as i f you’re s tudying it look at •Incarefully the Is lamic Middle Eas t. transport. it can take a long time to create a diverse workforce that reflects the variety of markets in which the organisation operates. at home Your to shift wealth. people and information. You should operation consider the capacity and efficiency of telephone and mobile networks. governmentsreceptive to specific negotiated may be concessions and incentives. alcohol is strictly •Intaboo ddle East and Asia. products. given the importance of information technology to the effective of modern businesses. msn b c.An understanding of the various government incentive ranging from tax holidays and regimes incentives. But in the Islamic Middle East. extension of the Middle Eastern custom but an to mix business with pleasure. your management team may be left behind in terms of cultural awareness and diversit y. m sn . to discretionary government grant support may help 3 . R&D incentives in the new tax landscape. It’s a major offens whi skey e in Dubai. Cultural business etiquette •Bringing your host in Tokyo a bottle of American is a thoughtful gift. Is the infrastructure modern. reliable and safe? How vulnerable is it to being compromised for example from power failures and cyber at tacks. However. while at the same time ensuring that they have a clear understanding of the local customs and operating conditions. Ernst & Young. B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 13 . telecommunication down time or traffic congestion? Is the location central to your regional markets. This is not considered rude. There are a wide range Entrepreneurial organisations through their very nature can achieve growth and develop a global footprint relatively quickly. Location and infrastructure Is economic infrastructure secure and reliable? How would you deal with power outages. gi fts must always the Mi begiven at the end of the meeting so they are not regarded as bribes . especially s to ask about ons. American whiskey is revered in China and Japan. the host country’s government may be interested in attracting your investment in order to boost the local economy and create jobs in strategic sectors. In the digital age this is arguably more critical than ever before. gifts are a great icebreaker and can be given at the start of a meeting •Business cards in Japan. It is important to the consider these possibilities at an early stage before committing to the target location. China and other parts ofAsia are considered a representation of one’s self – offer and receive cards wi th both hands. and cultural can impact significantly on business customs practices in the chosen location. utilities and information systems. it’s the norm mos t of to keep visitors waiting. of goods and services? suppliers It is import ant to understand the infrastructure that will your disposal in the target country and assess its be at reliability and the positive or detrimental impact it may on achieving success in your target have market. and are there emergency systems and disaster recovery plans in place? When expanding into the target location. consider the attributes which have made you whether successfulcan be leveraged to drive success abroad. 9.

need to think about the education level You will and experience of your prospective workers and how much you will need to invest in training. Local workforce What is the availability. 0 % 1 0% 20% 30 % 40 % 5 0% So u rc e: T h e G lob ali zat io n In de x S urv ey 20 09 14 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . financiers. In this respect. value. suppliers. It is a key foundation upon which the success business may be built. th r oug h t e le v i si on. As your organisation grows off-shore. the importance of language cannot be overstated. the level of tolerance and understanding of cultural and ethnic differences and language barriers in foreign markets ranks highly Globalization Index respondents amongst when asked about the most important cultural factorsconducting business internationally. The quality of local workforce may often be the deciding factor the in determining whether to expand your business to that location and also in determining how successful expansion will such an be. especially in higher. and in many more cases. regional nuances spoken or can be a source of misunderstanding and can lead to more serious problems. staf f and customers. off-shoring decisions. regulators.) When set ting up a local workforce in your target location.added functions. your human resources can mean the dif ference bet ween success and failure. there are numerous practical issues to consider. You will need to determine the terms and conditions of employment and you may need to negotiate with individuals. A. Even in countries where English is commonlyis the language of business. There may be unions local legislation or regulations concerning working hours. get ting the right people in the right location can provide a vital competitive advantage. as well as the tax and regulatory implications with associated this.g.‘ . c ine m a e t c . Your management of the team need the language skills to communicate will effectively who will interact with your business with those including government. labour or other bargaining agents. are being driven by talent shortages at home as much as by costcutting. weekends and public holidays and there may also be local customs or practices that will impact on the operation and activities of your workforce. Effective does communication (or the lack thereof ) has the ability to make or break the business. skill-set and cost structure of the local work force? When expanding into a global market. as it will underpin everything the businessin the target location. Global Services Location Index 2009 Which of the following cultural factors do you expect to important when conducting your be most international business over the next year? (% of respondents) L e ve l o f in t e r na t io na l e x p e r ie n c e o f w or k f or c e De g r e e t o w hic h pr o duc t s a n d s e r v ic e s n e e d t o b e a d a pt e d t o s uit f or e ig n m a r k e t s L e v e l o f t ol e r a nc e a nd und e r s t a ndi ng of c ult ur a l/ e t hic di f fe r e n c e s in y our fo re ign m a r k e t s La n gua g e b a r r ie r s in f or e ig n m a r k e t s To le r a n c e of f or e ig n b us in e s s i nflu e nc e in hos t m a r k e t s Cu lt ur a l s imi la r i t y t o ho me ma r k e t D e gr e e t o w hi c h a dv e r t is i ng a n d c ult ur a l i ma ge r y c a n be u nder st o od int ern at ion ally P r e s s a nd me di a f r e e dom in f or e ig n m a r k e t s Op e nne s s t o f or e i gn c ult u r a l infl ue nc e ( e .T Kearney ‘Companies are viewing the labour marketthrough a global lens. In addition you will need to consider your global remuneration whether short term and long approach and term incentive programs will be offered to your overseas employees. The when top ranked issue related to the level of international experience of the workforce is discussed below.Choosing location the (continu ed) 10. As demonstrated in the diagram below.

and business partners? How should suppliers you manage risks such as bribery and corruption? Who will be responsible for the recruitment of staff? Do you have an international management team ordo you need to build one? Commencing business operations in a new market can involve significant risks. essential.0 – 3.9 7. Negotiations might local be required over issues such as licensing arr angements.0 – 2. Global management team Who will negotiate with government. a variet y of issues may present themselves such as: • How to ensure that your business operations run smoothly? • How much hands on involvement is required by your management team?much time and resources will it • How consumeup your operations? setting • Will some members of your management teamrequired to spend a lot of personal time in the be new location? • Will Australian expatriates be sent to run the business or can the services of local managersupon? be relied To be prepared.9 5. and who from a management perspective is best placed to deal with those challenges. you must consider the challenges your business will face during the start-up phase. Does your organisation have sufficient knowledge of the host country and expertise to conduct negotiations or you need specialists with expert local knowledge will to negotiate on your behalf? The graph on page 16 shows that organisations that operate in more than 10 countries Corruption 2009 Perceptions Index 9.9 0 – 0.0 – 8. customers.Doing business overseas 11. labour conditions and local joint venture The right negotiating technique will be partners. Th e CP I is a ‘s u rv ey of s u rve ys ’.9 4. Having established the business in a new country. tax concessions.9 1. and therefore it is import ant to have a strong management team that understands the challenges ahead.9 T he Co rr up t io n P erc ep t io n s I nd ex ( CP I) me as u res t h e p e rcei ve d le vel o f t h e co rru p t io n in 180 cou n t rie s a nd t erri t or ie s ar ou nd t he wo rl d.0 – 4. © Tran s p aren cy I nt ern at i on al.9 6.9 3. B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 15 . In determining this.0 – 5.0 – 6.0 – 7.0 – 1. bas ed o n 13 d if f eren t exp er t a nd b u s in es s s ur veys .9 2. Al l rig h t s r es er ved .0 – 10 8. consider any potential negotiations with the government or other officials in the host countr y. S co res ran g e f rom 0 (p e rcei ve d t o b e hi gh ly c orr up t ) t o 1 0 ( pe rce ive d t o h ave lo w le vel s o f c orr up t i on ).

immigration and tax compliance? Should these functions be outsourced? Although expatriates know your business and may the opportunit y to work overseas. More global companies are more likely have to international management Roughly what proportion of senior management are nationals country? F orei gn o perat i ons in 11 or mor e cou nt rie s F orei gn o perat i on s in 1 –10 cou nt rie s Do mes t o ic perat i on s o nly 0 % 10 0% (continu ed) 12. transport and protection arrangements as part of their overall remuneration and benefits package. This level of support will vary from organisation to organisation. facilitation fees or business or kick-back payments? How will you deal with such demands while protecting the interests and integrit y of your business? Will the local authorities be of assistance be complicit in the process? Failing or will they to identify and deal with such risks can bring serious consequences. You must also ensure have the resources to manage the related that you localinternational compliance obligations. particularly and if you are expanding into more than one country. they may enjoy also lack local knowledge. specifically due to the revised rules in Australia for the taxation of employment income. The map on page 15 illustrates the perceived levels of corruption in countries around the world. Increasingly organisations are also linking their mobility with their t alent management strategy. as such practices may be criminal under the laws of both Australia and the offences host country and punishable with heavy fines and/or prison sentences. which may include specific accommodation. If decide to use expatriates rather than local hires. Generally. To ensure your expatr iate st aff are not distracted fr om the job at hand. Another important consideration (and cost) will be of security for your employees. They will need to be assured of their safet y. Relocating and remunerating expatriates can be more expensive than local hires. should first consider the objectives of the so you assignment and your desired return on investment. The programs tax s of your employees will also get more complicated affair with tax exposure in more than one location.Doing business overseas are highly likely to have a diverse management team those with only domestic operations are whilst unlikelya significant proportion of senior management to have from another country. most organisations develop formal policies that consider issues such as the level mobility of remuneration. In some that countries. du e t o rou nd in g. employees may be the target of extortion expatriate threats. kidnapping attempts or other forms of violence. Have you also considered the possibilit y of corruption in your host country? Is it common for local officials people to demand bribes. even if the new host location plan should is attractive. 16 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . of another 30 16 19 9 26 % 55 22 9 6 5 8 8 5 1 4 Senior management from another country: Less than 5% 5 – 14% 15 – 24% 25 – 49% 50%+ S o ur ce: T he Glo bali zat i on In dex Su rv ey 2 00 9 * F ig ure s ma y n ot add u p t o ex ac t ly 100 % . A repatriation plan should be implemented so the knowledge and skills gained on assignment are retained within your organisation. however this along with the development of an incentive be factored in. you you also consider what happens when the must assignment is finished. Tax equalisation arrangements are a common mechanism used for employees who work abroad for a period of time. relocation benefits and other incentives. Global human resources considerations What benefits will you provide to expatriates and what are the tax consequences? Do your employees require security protection? Do you have a team that can deal with assignment management. organisational suppor t will be required to deal with relocation and immigration issues. Benefits provided to your Australian whilst working overseas could potentially workfor ce be assessable both abroad and domestically.

I n di cat e s t o t al A uM of I s lam i c f u n ds in US $ b il li on I n di cat e s t he n um b er of f un d s B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 17 .5 0. successful businesses continued their growth path duethe establishment and implementation of realistic to and effective business models that had been stress tested. There are many options available for raising finance for your global expansion.5 – 1 0. The map below depicts how Islamic finance is available worldwide.1 – 0. testing should involve hypothetical parameters This such interest rate hike.1 1 N o t e:Fu nd s pe r c ou nt ry in cl ud e t ho s e m an ag ed b y p la yers h ead q uar t ere d i n t ha t re s p ect i ve ju ri s di ct i on . changes to the non-port folio financing dividend exemption and withholding tax implications. You should also confirm that the the proposed debt to equity ratio on both the Australian and foreign entity balance sheet is permitted under the relevant law as potential breaches of the transfer taxation pricing or thin capitalisation rules can result in the of tax deductions. E rn s t & Y ou n g an aly s is 9 ~ 1. Zaw ya Fu nd s M on it o r. Financing What are the cash flow needs of your business? What is your projected revenue growth? Are your financial models sound or overly optimistic? Do you need strong partners to finance your expansion? Have you considered Islamic finance as a source of funds? What is the debt equity mix of funding? What are the tax consequences? It is import ant to stress test your financial models and revenue targets to ensure you can service your debt.1 1 ~ 2 2 . currency deflation or dif as an ficult conditions. function is per mitted under local and Austr alian law to ensure that ter ms of your finance arrangements do not breach the the transfer pricing rules or thin capitalisation thresholds.8 B ah ra in KS A K uw ait ~ 4 . denial Global Islamic Funds by Hom e Country of Asset Manager (QI 2010) 5 834 8 45 3 1 US A 14 2 1 3 2 7 181 2 100 24 2 ~ 2 . Hybrid arrangements.7 1 4 6 27 82 6 1 M alaysi a ~ 5 . however.0 13 UAE 17 7 3 26 Islamic AuM by Country (US$ billion): 10+ 1 – 10 0. you may wish to consider financing options such as Islamic emerging finance. How you manage your ongoing finance raises significant taxation considerations both in Australia and your target country. There are. 2 ~ 6 .1 Sou r ce : E ur ekah e dg e. well established conservative options including bank or intercompany loans. You should test your assumptions by using financial modelling to determine if you can achieve the desired debt to equity ratio recommended by your financial You should confirm that your treasury advisors. During the global financial market crisis.01 – 0.13. You should stress test assumptions made in financialto ensure that you can still service models the recommended debt levels if certain factors turn to worse. of course. need to be reviewed carefully from a tax perspective.

The market conditions and the opportunities to capture immediate market share will impact the design of your initial business model and structure. although the tax and accounting treatment can be complicated. including those concerning commercial. For example.55 Are you looking for slow organic growth? Will you start out with a sales office or are you looking for a green field development? Are you looking to establish an immediate local presence? If so.20 What are the legal and administrative procedures and regulatory requirements for setting up the operating structure and starting the business? Should you outsource the set-up to corporate service providers? secretarial How easy is it to start-up your business in the host country? What is the level of red tape and how will you go about cutting through it? You may have local accounting and reporting obligations and other legal that you must comply with at start-up and statutes on ongoing basis. The hedging of cross currency supply or loan contracts may remove the risk but will also come at a some of cost. It can significantly alter the margins of goods sold on the world market.30 1. How will you make sure that you have identified all obligations and how you will satisf y them? It may be cost effective to outsource your corporate accounting and tax functions to local secretarial. Foreign exchange management and currency risk/controls Is the local currency stable or volatile? Is currency hedging available at a reasonable cost? Could currency restrictions inhibit or even prohibit of international funds? the flow Organisations generally can hedge international internal transactions effectively without adverse outcomes.25 1. will you establish a joint venture with a host country or operative and/or set-up various contracts partner to establish your operations? T here will be costs and benefits associated with these choices which must be considered. legal. Implementing structure the operating 1. Choosing structure the operating (continu ed) 16. 18 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . experts.35 1. you build may have time to set-up a simple representative office only from which you can immediately negotiate customer These factors may in turn drive your contracts. 15. you may time to establish various operating entities have and up your infrastructure such as factories or. you need to ensure that the target location does not impose limitations on the movement of currency in and out of the country. The fall of the Euro accelerated crisis when the crisis spread to other European countries.Doing business overseas 14.45 1.40 1. The diagram below illustrates the fall of the Euro against the US Dollar initially triggered by the sovereign debt in Greece.50 1. For example. as well as the cost of overseas sourced inputs. The risk and commercial exposure rises exponentially where transactions with external suppliers customers and are involved. N ov Dec J a n Fe b Ma r A pr Ma y J un J u l A u g 20 20 10 09 S ou r ce : Y aho o F in anc e In addition to foreign exchange management. will you set up a joint venture or will you acquire an existing local business? There are a number of factors that will determine the method of entry into your chosen location. The rise fall of a currency can impact the economics of and an entire project or production set-up. regulatory and tax issues. including criminal prosecutions and be prison sentences. choice operating structure and also the method you of legal adopt to gain a foothold in the market. 1. Penalties for non-compliance an maysevere.

dividends and royalties. regulatory constraints that may hinder such an or other expansion. you should give consideration to any potential infrastructure. You could also explore the possibility of vertical integration such as the acquisition of key suppliers or distributors. An example may be moving your existing production or other business functions from Australia and/or other locations to your target location. In cert ain jurisdictions. Overall businesses it be the c atalyst for better efficiencies will in foreign operations. You should consider local maximum and international commercial contracts. structure and profitability of your business from an international give rise to transfer pricing and other perspective and tax issues. Ernst & Young Australia. transfer pricing and intellectual property Have you identified all possible supply chain efficiencies? Have you considered potential Australian tax issues as you move functions. the adequacy of local physical infrastructure beyond that which was assessed during start. 18. Non-portfolio dividends paid by the foreign organisation to Australian corporate shareholders are not taxable in Australia at the corporate level and also do not generate franking credits. operations in multiple countries.up and the reliabilit y of associated services on which the business will rely.17. thin capitalisation and transfer pricing rules must also be considered. Supply chain. taxes will be triggered on the payment of technical services fees and other payments to non residents. Business and international t axation Are you aware of how the new Australian attribution in relation to controlled foreign regime companies you to take better advantage of may allow efficiencies overseas? How will profits be taxed in your target location? What is the treatment of losses? Consider how tax is assessed and paid in the host country. intellectual and risk offshore? Is your property intellectual data protected? property and ‘The reform of the Australian CFC rules will improve the competitiveness of Australian expanding overseas. Ensure that start up losses carried forward to reduce future tax liabilities. types B us in es s b r ie fi ng s er i 20 :i s s ue s f o r b u s in es s es exp an di ng i nt e rna t io nal ly es 19 . Double taxation agreements to allocate taxing rights bet ween the may operate host country and Australia. Revenue authorities often focus on these of transactions. can be Payment of withholding taxes will typically be required on cross-border payments of interest.’ Daryn . Partner Moore Leader – International Tax Services Oceania Australian international tax rules such as the controlled foreign company (CFC). The development of an effective supply chain process to establishing ef ficient operations and is vital achieving profitability. you If you have may consider the suitability of the target location for a shared services centre. Detailed tax due diligence is recommended if you are acquiring a foreign business. Australia has is continuing to reform the CFC rules to and ensure that Australian organisations are not disadvantaged in competing overseas. Such decisions may result in the shifting of risk and/or intellectual property from the target location to another This may have an impact on the cost location. Australia does allow for certain tax deductions for a loss or outgoing incurred in deriving foreign dividend income. The timing and quantum of tax payments will impact your cash flow. However in doing this.

The above list has changed considerably in both order and content from the 2009 report. The global war for talent and compensation structure s 5. You will need to t ake into account local laws. internal/ external audit and other external controls? 20. particularly if your business was an important employer in a country or region. risk associated with not succeeding The business in (continu ed) an emerging market for example. Ernst & Young Business Risk Report 2010 20 B u s in es s br ief in g s er ie s: is s u es f or b us i nes s e s e xpa nd in g in t ern at i on all y 20 . Aggregating the results worldwide risks for and across industry sectors. Access levels government debt of 3. Increased cost pressures as the result of commodity inflation and low cost price competitors 7. moved from rank 12 in 2009 to rank 5 in 2010. as these markets continue to drive global growth 6. 4 is based The Ernst & Young Business Risk Report 2010 on interviews with industry executives and analysts representing 14 industry sectors. should also consider your organisation’s You exposure fraud. should be There are also reputational risks to consider. The strategic imperative of succeeding in an emerging market. the host saleshares or even floating the business. Political backlash and reputational risks triggered corporate by social responsibility breaches 10. which demonstrates that businesses operate in a dynamic. Consider whether relations local regulations restrict the transfer of funds overseas. Staying and government regulation on environmental issues 9. To conductedto ascertain the top 10 business risks research facing multinational firms. tax and financial issues. an effective risk management strategy and process should be implemented. T he survey asked interviewee to identif y and rank the top each business 2010. The exit of strategy part of your overall business plan. Incumbent firms in transitional sectors adjusting to non-traditional entrants ahead of consumer preferences 8. Are you at greater risk if the control of to potential your organisation resides in only a handful of managers. Risk management Have you identified areas of risk and how you will address them? Are your foreign operations susceptible to fraud? There are a number of business risks that should be considered when entering an emerging or international identify these risks. You must determine if you wish to maintain a presence in also the country. Uncertaint y around regulation and compliance to credit and the impact of rising 2. everchanging environment that requires constant global monitoring. Rescue mergers and regulatory changes that mayforce new transactions. Obtaining insurance in your selected host country appropriate is important consideration to mitigate against an potential business risks. Ernst & Young market. The withdrawal of global stimulus programs 4. to manage existing and newly emerging risks. To avoid costly litigation or compensation must also be aware of the payments you industrial environment. Exit or winddown Will you continue to maintain a presence in this location? What are the legal and commercial issues associated with terminating business and employment contracts? What is your strategy for redeploying your resources? There are different ways to exit or wind-down your operations in a host country.Doing business overseas 19. 4. Options may include liquidation. rather than a structure with a board of directors and policy and process around corporate governance. resulted in the followingbusiness risks for multinational firms top 10 ranked by importance: 1. You should also recognise that in such an environment.

tap into existing net works. Political and social climate • Is the political system stable? How do you assess sovereign risk? • Does the country suf fer under high l evels of sovereign debt? • Is there likely to be social unrest or are workers organised in ful power unions? • Is the tax regime business friendly and/or competitive? • Does the country have free trade agreements or double tax treaties? • Does the regulatory regime set the scene for a sound corporate governance framework? • Is it a common law system? If not. Global trends 3. do you understand the outcomes? • Do the laws and the legal and judicial system provide support for and protection of commercial acti vities? • Should you develop your products in emerging or fast growth markets? • Should you have a presence at gl obal innovation clusters? • Are grants and incentives available for innovative organisations? • Is economic infrastructure secure and reli able? • How would you deal with power outages. research Market Choosing the location 4.20 issues internationally 1. talk to your advisors and visit your short listed locations Yes No 2. Local workforce B us in es s b r ief i ng s er i20 :i s s ue s f o r b us i ne s s es exp and in g i nt er nat i on al ly es 21 . tel ecommunication or down-time traffic congestion? • Is the location central to your regional markets and supplier s of goods and ser vices? • Are there significant cultural differences that may impact the way you conduct your business? • Are there likely to be language barriers? • What is the availability. Innovation and incentive s 8 Location and infrastructur e 9. Local tax and regulatory environmen t 6. Planning for expansion • Clearly define and stress test your strategy • What are the implications of your international expansion for your existing business operations? • Is your organisation exposed to new and emerging markets? • Has the composition of your major competitors changed? • Is foreign direct investment in your industry sector clustered in locations where you do not have a presence? • What research is available to provide you with information on market and industry conditions? • Is this information up-to -date and what is the future outlook? • Create a short list of new and emerging markets. Legal system 7. Strategy for businesses expanding Table based on the top 20 issues and related questions. skill-set and cost structure of the local work force? Yes No 5. Cultural compatibilit y 10.

Implementing the operating structure 16. will you up a joint venture or will you acquire an existing local set business? • What are the legal and administrative procedures and regulatory requirements for setting up the operating structure and star ting the business? • Should you outsource the set-up to corporate secretarial ser vice providers? • Is the local currency stable or volatile? • Is currency hedging available at a reasonable cost? • Could currency restrictions inhibit or even prohibit the flow of international funds? 13. suppliers and business How should you manage risks such as bribery and partners? corruption? • Who will be responsible for the recruitment of staff? • Do you have an international management team or do you need to build one? 12. Exit or wind. Supply chain. Foreign exchange management and currency risk/controls 17. immigration and tax compliance? • Should these functions be outsourced? • What are the cash flow needs of your business? What is your projected grow th? Are your financial models sound or overly revenue optimistic? • Do you need strong par tners to finance your exp ansion? you considered Islamic finance as a source of Have funds? • What is the debt equity mix of funding? What are the tax consequences? • Are you looking for slow organic growth? Will you start out withsales office or are you looking for a green field a development? • Are you looking to establish an immediate local presence? If so. Financing 14. management Risk 20. Global human resources considerations • What benefits will you provide to expatriates and what are the tax consequences? Do your employees require security protection? • Do you have a team that can deal with assignment management. transfer pricing and intellectual property 19. Choosing the operating structure 15. intellectual property and risk offshore? intellectual property and data Is your protected? • Have you identified areas of risk and how w ill you address them? • Are your foreign operations susceptible to fraud? • Will you continue to maintain a presence in this location? • What are the legal and commercial issues associated with terminating business and empl oyment contracts? • What is your strategy for redeploying your resources? B us i nes s br i ef in g se r ies0: is s u es f o r bu s in es s es exp an di ng int e rn at io na ll y 2 18.20 issues checklist Doing business overseas 11. Busine ss and international xation ta • Are you aware of how the new Australian attribution regime on to controlled foreign companies may all ow you to relati in take better advantage of efficiencies overseas? • How will profits be taxed in your target location? What istreatment the of losses? • Have you identified all possible supply chain efficiencies? • Have you considered potential Australian tax issues as you move functions. customers. Global management team (co ntinued) Yes No • Who will negotiate with government.dow n 22 .

.

Partner Leader – International Tax Oceania Services Phone +61 2 9248 5538 Email daryn. Sydney.Contact details Ernst & Young Ernst & Young Centre George 680 Street.ey.logue@au. Sydney GPO Box 2646. Sydney. Partner Leader – Strategic Growth Oceania Markets Phone +61 2 9248 5870 Email greg. NSW 2001 Service 1300 137 322 Phone 02 9290 134402 9262 1512 Fax Email service@charteredaccountants.a u Lee White Executive General Manager – Members Phone + 61 2 9290 5598 Email lee.frank@au.ey.com.com The Institute of Chartered Accountants in Australia 33 Erskine Street.com Greg Logue. Partner Asia-Pacific Chief Operating Officer – Tax Phone +61 2 9248 4810 Email graham.com.white@charteredaccountants.com Daryn Moore.a u .co m Graham Frank.com.moore@au. NSW 2000 GPO Box 9985.au charteredaccountants.ey.ey. Sydney NSW 2001 Phone +61 2 9248 5555+61 2 9248 5959 Fax www.