Internationalization - Subsidiary Office Or Foreign Branch?

Whether you want to make business with foreignMoreover there are advance tools that offer a
individuals, or you think seriously to purchasecoverage in case of purchaser's non-fulfilment
foreign companies you will have to confrontduring the purchase of a third foreign company
yourselves with the logics of corporate evaluation.The concept to keep clearly in mind is that with
Nowadays the definition of a true and correctthe internationalisation the risk outline changes and
rating is the decisive, essential requirement tothe frame of insurance tools on which to rely on
take entrepreneurial choices, even more inhas accordingly to change as well.
international contexts.I'm going to close my analysis with an in-depth
In the present article I'm going on from financialexamination of a couple of topics bound to the
aspects to insurance ones while digressing intointernational corporate law.
more specific topics of international law. I'm goingSubsidiary office or foreign branch? The first one
to deal with these themes in a confident way andhas the advantage of being more easily
perhaps I will be lacking in not choosing a univocalestablished at lower cost. The second one, with
content but in this way I think I will offer youits more complex structure, guarantees the
interesting hints if you have decided to cross thelimitation of the risk capital to the branch's alone;
national borderlines.meanwhile in case of subsidiary office it is always
It is a matter of relying on professional peoplethe head office to answer jointly and severally for
that can base their analysis on the most accurateany events. Besides notice that the structure of a
methodologies. The rating has to show clearly thebranch allows the entry of local partners.
informative resources from which it takes itsAn other extremely interesting aspect of this
information, it has to allow transnationaltopic is represented by the join-venture: this is a
comparisons or through different principles ofcontract that disciplines the cooperation among
accounting.companies and its aim is the realisation of a
The risk can be reduced thanks to reliablespecific economic project.
information but it can be held in a more traditionalThough it can be established among Italian firms
way too and rationalized through insurance tools.too, it is normally used for international
Usually when we speak about internationalizationcooperation. Just think about the importance of
and insurance processes we mean typical riskslocal partners' knowledge while penetrating into a
due to the country situation and credit. I want tonew market as some topical operations have
focus your attention on some very commonrecently showed in the automotive fields.
tricks to which the insurance world has reactedThe join-venture can be both contractual and
with Ad Hoc tools.corporative: in the first case and for temporary
Let's start with the Director and Officer insurancerelationships, there is just a contractual bound,
that prevents managers and administrators fromwhile in the second case there is a deeper
claims for compensation because of theircooperation represented by the establishment of
conducts. In some countries the risk due to thesea dedicated company.
events is very high and providing an entrepreneurApart from the aspects of the matter considered
with tools of this kind can be very useful in orderabove and since the complexity of economic
to recruit professional people with high profile thatcontext, I think the best piece of advice is to rely
will be able to work in a safer, comfortable way.on competent professional people because this is
There are countries where conflicts caused byno longer the time to internationalise in an
mobbing, downgrading, discriminatory dismissal areoff-hand, rough way.
highly probable and this is why it is very useful toDario Ferrigato, Marketing consultant, Senior
rely on ad hoc insurance tools.consultant at ADVBOUCLE & PARTNERS
Unfortunately it has become very useful the soMarketing consultants
called Crime Insurance that assures the companyYou have full permission to reprint this article
even against account fraud and embezzlement.provided this box is kept unchanged.