Learn | Top Compliance Challenges Companies Face When Going Global, and Steps to Overcome Them

 Learn | Top Compliance Challenges Companies Face When Going Global, and Steps to Overcome Them

Top Compliance Challenges Companies Face When Going Global, and Steps to Overcome Them

“Compliance is the cornerstone of good business.” — Mairead Divilly, Partner Financial Management and Outsourcing Services, Mazars Ireland

When employees in different countries join your team, they bring experience and unique skills to your company. However, building an international workforce is a complex process that requires experience and knowledge to navigate regulations throughout different countries.  

In this session of the PANGEO Conference, moderator Filipe Lousa, Director of Privacy and Compliance at Globalization Partners, and Mairead Divilly, Partner Financial Management and Outsourcing Services at Mazars Ireland, discussed the most common compliance challenges during global expansion, and the risks of noncompliance. 

What are some of the key findings from the compliance report Mazars Ireland conducted? 

To start the conference, Mairead Divilly shared results from the Mazars Ireland compliance report that affirmed a clear compromise toward compliance among leaders. Divilly stated that compliance is the cornerstone of good business it helps build trust with investors. 

What are the most common compliance challenges companies face while going global, and how can they navigate them? 

Global hiring brings new challenges to the table. According to Divilly, companies need to analyze the relation between costs and benefits, and measure the advantages and disadvantages of hiring international team members. Employers need to consider not only the gross salary of the employee, but also the additional contributions that local legislation requires to be compliant. 

“We understood employees are more likely to stay in companies that are making remote work a permanent fixture. As I mentioned previously, compliance is also critical to retaining employees.” — Filipe Lousa, Director of Privacy and Compliance, Globalization Partners 

What are the risks and penalties associated with noncompliance? 

Mairead Divilly stressed that legal consequences are not the only danger, and emphasized that “the casualties of noncompliance are that you lose the trust of your stakeholders, your customers, your investors the sheer reputational damage is absolutely huge.” To avoid the risk of making mistakes, Divilly considers that compliance needs to be an executive priority supported by proactive management. 

What are the common hurdles related to entity setup that companies often face? 

As Filipe Lousa pointed out, laws and regulations vary from country to country, increasing the burden on companies to ensure compliance. Divilly stated that “the lack of local knowledge of tax, legal, and accounting rules are obviously an important consideration when expanding.” She also mentioned that knowledge of local culture and ways of doing business are invaluable when setting up entities in other jurisdictions.  

Both speakers emphasized partnerships with companies or firms that already have local entities as a way to minimize the burdens of global expansion.

In the final remarks, Lousa and Divilly discussed that technology will play a key role in the near future in terms of compliance. As international teams expand, the need for software to keep track of processes and legislation in different jurisdictions will grow. Companies with resources who invest in a global compliance tool will gain a head start. 

“There is a clear sense of responsibility of business leaders towards compliance.” — Mairead Divilly, Partner Financial Management and Outsourcing Services, Mazars Ireland

What we learned:

  • The risks of noncompliance are not only legal – it also damages the company’s reputation.
  • Compliance is both an obligation and an opportunity – it instills trust in your company.
  • Specialized technologies and tools will be more important for compliance in the near future to manage international needs.

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