Another way to deal with foreign money is to forget about converting it into dollars and instead spend it in the country of origin--say, to buy parts or fund local operations. Rob Monster is founder of Global Market Insite, a Mercer Island, Washington-based market research software firm with customers in more than 60 countries. The company bills and collects in dollars, except in Europe, the Middle East, and Asia, where it keeps local bank accounts. "We have the ability to collect and spend in those foreign currencies," Monster says. "So to some extent we are hedged because we are able to reinvest the currencies."
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5. Can a U.S. business qualify for tax breaks or government grants overseas?
Absolutely. Many countries roll out the red carpet for foreign entrepreneurs, even as they wrap local business owners in red tape. Governments often will provide American companies with resources such as one-stop shops for business registration, access to special pools of tax-funded R&D money, and physical real estate in regulation-light "special economic zones" designed to attract foreign investment. With offices in 80 countries, the U.S. Commercial Service can help you identify nations that are particularly eager to do business with Americans. For $680 to $800 per day, the Commercial Service's Gold Key program can set up appointments with potential overseas partners and provide translators. If you do take advantage of foreign tax incentives, hire a lawyer or accountant in-country to keep an eye on changes in the tax code. Also, make sure there are no currency exchange restrictions that would affect your ability to repatriate earnings.
For more information on foreign incentives:
- The Department of Commerce offers a database of trade leads at export.gov. Or, you can get the information at 1-800-USA-TRAD.
- Find a U.S. Commercial Service specialist in your area at export.gov/eac/index.asp.
- The Commercial Service publishes country- specific guides to opportunities for U.S. entrepreneurs. Go to export.gov/mrktresearch/index.asp and click on market research to search.
- The U.S. government's Advocacy Center has tips on securing contracts with foreign governments at export.gov/advocacy.
6. What should I do if someone asks me for a bribe?
Bribery is against U.S. law, even if it's committed overseas. There are exceptions for certain gifts and so-called "grease" payments when they are permitted by local law. But the regulations are murky at best, and the Feds have been cracking down on violators in recent years under the Foreign Corrupt Practices Act. In 2005, for example, Titan, a San Diego telecommunications firm, paid a record combined penalty of $28.5 million to the Department of Justice and the SEC for bribing officials in the west African nation of Benin. (Some of the illicit funds allegedly went toward buying a pair of $1,850 earrings for the president's wife.)
Finding a trustworthy local partner can provide you with some insulation from corruption. That's the strategy Michael Torreano used to open a restaurant in Dushanbe, the capital of Tajikistan. Torreano's partner meets with officials and makes sure fees and paperwork are processed in a timely manner. Torreano advises entrepreneurs to meet bureaucratic obligations well before the stated deadline. Corrupt officials will sometimes target for a shakedown those who are slow to file paperwork, he says. Finally, remember that there's always the chance that a person you bribe can't or won't deliver the promised help.
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