International Shelters

A shelter operation provides the exporter with control over pricing, product and distribution channels while avoiding the highly expensive human resources factor.  With up to 10 times the payroll tax cost in Europe compared to the US, success depends on a well thought-of plan to deal with VAT, Employment and Income Taxes.  In Europe, employment taxes include health coverage, retirement, generous unemployment benefits, vacation, holidays and union dues.  A shelter deals with all these in a very efficient and cost-effective manner.

Another option for the new exporter is to develop some form of partnership abroad that can help overcome the challenges of doing business internationally. Partnership arrangements have several advantages. A local partner can complement a company’s capabilities, providing the expertise, insights, and contacts that can make the difference between success and failure.

A well-structured partnership offers concrete benefits to both parties.

Each company focuses on what it does and knows best.

• Partners share the risk.
• Partnering can extend each party’s capabilities into new areas.
• Ideas and resources can be pooled to help both sides keep pace with change.
• Small firms can use partnering to take advantage of economies of scale.
• Through partners, a company can approach several markets simultaneously.
• Partnering can provide a firm with technology, capital, or market access that it might not be able to afford on its own.

Both parties can transform the synergy gained into a competitive advantage.
Before investing time in finding a partner, make sure that partnering makes sense for your company. If your needs can be satisfied in-house within a reasonable time frame, a partner may be unnecessary. If the problem is financial, you may be better off looking for investors instead of partners. But if, after going through these options, there is still something missing (special expertise, local market presence) then partnering should be considered.

If you determine that a partnership is appropriate, you will need to define its form, structure, and
objectives. Your export plan will be useful in outlining your goals and your ability to achieve them. Finally, define what you expect from a partnership. Among the most popular forms of partnerships are joint ventures and strategic alliances.

A major challenge for new exporters is to find a suitable partner. The right partner is one that
complements and strengthens your capabilities and will work efficiently and effectively with your
organization. XL Group’s services are efficient tools to assist you in your search for the right partner.

It is very important to consider “in-country” legalities when considering any form of partnership. Local laws may prescribe or restrict the rights and privileges of foreign partners. You should consult with our qualified and reputable international lawyers to help guide you through potential minefields of partnering internationally.