Being an international business hub has helped bolster South Florida’s economy and spur economic development.
But as the region becomes increasingly attractive for Latin American and European companies, doing business internationally presents an array of complex tax and compliance issues.
While these issues can present foreign companies with another hurdle to doing business in the United States, local accounting and tax firms are seeing an opportunity for growth by helping them navigate through them.
The Business Journal talked with some of the area’s accounting leaders about industry trends, specifically focusing on tax and compliance issues faced by international companies doing business domestically.
What are some of the biggest issues that international clients are dealing with when it comes to tax and compliance issues?
Blain Heckaman, managing principal at Kaufman Rossin: At the top of the list is structure … This also includes owning real estate. Do I own it [real estate] individually, do I own it in a taxable entity. All of those are issues that you really need to understand and really need to chat with the individuals as to what fits their case best. Structure is key.
How have these regulations and issues changed over the past few years?
The main regulatory area that’s challenging is the bank anti-money laundering regulations that really require all the banks to really understand if a foreigner comes in and opens a bank account where this money is coming from. It’s a huge, huge issue because of the amount of foreign investments that take place in South Florida. A lot of the pressure is really coming from a banking, regulatory environment.
How much of your business is concentrated in this area? How has it changed over time?
It’s certainly been growing, probably at a faster rate than other areas. We are serving clients in various forms or another from 50 to 60 countries. I would say probably 20 to 25 percent of our business is international in one form of another. It’s a very referral-based process and the more experience you have the more people are going to come your way.
How is technology impacting this area?
It really depends on the complexity of tax reporting and compliance and whether there is enough money thrown at it to make it an automatic process. I, for sure, see the domestic compliance business heading in that direction, and we’re going to have more people advising and consulting than number crunching in the future. I would expect the international reporting to follow that similarly. The industry is moving in that direction, and the question is who is going to develop the software and how much is it going to cost.