INTERNATIONAL EXPANSION

INTERNATIONAL EXPANSION Key considerations JAMES FIELDHOUSE (M&A) ED DWAN (TAX) 28 OCTOBER 2014

introduction • Introductions • James Fieldhouse (M&A Senior Manager) • Ed Dwan (Tax Partner) • Why international expansion? • Achieving international expansion • Organic • Acquisition • Growth via acquisition • Key considerations • Agenda

introduction • James Fieldhouse • Joined BDO in 2003 • Specialised in M&A since 2007 following a background in audit. • Advises on Private Equity and debt fund raisings, private company acquisitions & disposals, and accelerated M&A’s across a broad range of industry sectors, including recruitment and payroll services. • JAMES FIELDHOUSEM&A Senior Managert: 07854 278 307 • e: james.fieldhouse@bdo.co.uk

introduction • Ed Dwan • Ex HRMC inspector • BDO Partner since 2008 • Specialises in recruitment and payroll sector • FCSA accredited auditor • Currently advising a number of local recruitment businesses on UK tax compliance matters including overseas expansion • ED DWANTax Partnert: 07801 418 910 • e: ed.dwan@bdo.co.uk

Why international expansion? • Exploit new territories • Access to new geographies and/or markets • Part of a defensive strategy? • Expand global footprint and/or brand • To accelerate influx of candidates • Enhance attractiveness to future potential buyers • Rationale ENSURE CONSISTENT WITH OVERALL COMPANY STRATEGY AND BUSINESS PLAN

achieving international expansion • Organic v Acquisition • Organic • Set up an office or operation in an overseas territory using existing resources • Acquisition • Acquire, merge or form a joint venture with an overseas business

achieving international expansion • Organic v Acquisition 1. Speed 2. Culture 3. Cost 4. Geography 5. Size/scale

Growth via acquisition • Key considerations

Growth via acquisition • Key considerations (continued)

International Expansion • Tax Considerations – Organic Growth • Understand the nature of the assignment, potential length and the role – monitor as circumstances change • What are the current circumstances of the assignees • Partner with a recognised local firm • Ensure UK tax implications covered • Establish a clear process that will stand up to Due Diligence scrutiny

International Expansion • Tax Considerations – Growth by acquisition • Perform tax specific Due Diligence using local country specialists and UK as appropriate • Understand the tax regulatory environment of the relevant countries – e.g. what are the penalties for getting it wrong? Is the risk/ reward ratio workable? • Once acquired, establish clear processes and protocols to monitor compliance on an ongoing basis (e.g. monthly updates, quarterly status reports)

CONCLUSION • Key points • Do your homework • Take counsel and take advice • Stick to your plan (or at least don’t stray too far from it!) • Do your diligence • Continually re-asses performance against plan

ANY QUESTIONS • JAMES FIELDHOUSEM&A Senior Managert: 07854 278 307 • e: james.fieldhouse@bdo.co.uk • ED DWANTax Partnert: 07801 418 910 • e: ed.dwan@bdo.co.uk

INTERNATIONAL EXPANSION