Kreston Reeves has advised AxFlow UK on its acquisition of Moody Direct. AxFlow is one of the UK’s leading providers of pumps, valves, mixers and heat exchangers in the fluid handling sector and is part of the Axel Johnson AB group with operations across 26 European countries. Moody Direct is one of the country’s foremost suppliers of packaging solutions to the dairy, food and beverage industries and the chemical and pharmaceutical industries.
Craig Dallender said: “It was a privilege to work alongside Diane and the AxFlow team on this acquisition. Kreston Reeves has built a strong buy-side corporate finance team, helping businesses grow through strategic acquisition. We are thrilled to have played a part in the continued growth of AxFlow.”
Neil Langdown, Managing Director of AxFlow UK said: “We are thrilled to welcome Moody to the AxFlow family. Its expertise in hygienic sales and servicing and reputation for best-in-class customer service will strengthen AxFlow’s existing position in the UK. Moreover, this will enhance our onsite service capability and enable us to offer our customers a comprehensive service offering for homogenisers, separators and plate heat exchangers.“
Diane Booth, Finance & Operations Director at AxFlow said: “I would like to thank the team at Kreston Reeves. Their advice has been timely, insightful and critical to get this deal done.”
Ken Wildm Director of Moody, said: “Moody’s success has been built on technical expertise and a commitment to customer satisfaction. Joining forces with AxFlow UK not only strengthens our ability to serve customers in our core segments of F&B and Dairy but also opens up new avenues for growth, particularly in the processing industries.”
If you are interested in doing business with Kreston Global, contact us here.
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Maessen Tentsupply, Voorhout, Netherlands
Active since 1998, Maessen Tentsupply is a Dutch tent supplier with a committed team of 30 employees, focused on becoming the most solid and friendly tent supplier in the Netherlands. The company has recently merged with Veldeman Group, a specialist in tent structures and modular infrastructure. This partnership strengthens Veldeman’s geographical reach and supports Maessen Tentsupply’s future growth. Veldeman Group, backed by IK Partners, has over 50 years of experience and a strong international reputation.
Maessen Tentsupply sought to increase its professional capabilities and accelerate growth, while Veldeman Group aimed to enhance its presence in the Dutch market. Qwintess, with Julian Jonker as the primary advisor, supported Maessen Tentsupply as their M&A advisor on the sell side. In the new structure, Qwintess also assists in integrating Maessen Tentsupply’s reporting with Veldeman’s consolidated procedures.
Effective integration and growth
The collaboration includes setting up a project administration system with preliminary and final calculations to ensure smooth integration. Recently, Maessen Tentsupply expanded its storage capacity, which supports the efficient delivery of its product range in the Dutch market. Veldeman Group has reinforced its Dutch market position and is well-prepared to take on challenging projects ahead.
If you are interested in doing business with Kreston Global, contact us here.
Veronica Quintana is a Director at CBIZ and CBIZ CPAs, specialising in providing services to companies in agriculture, construction, manufacturing, real estate, restaurants, and professional services, including government contractors. She leads the CBIZ Latino-Owned Business Service Team, created to support Latino business owners as they grow, innovate, and transition their businesses to the next generation. With over 25 years of experience at CBIZ, Veronica has managed bookkeeping and tax clients in the Oxnard office, overseeing tax and accounting services for commercial entities. She is deeply involved in her community and serves on the boards of several nonprofit organisations. Veronica has been recognised for her contributions, winning the Latino Business Awards “Professional Services” category 2012.
US firms turn to nearshoring for labour
October 15, 2024
Nearshoring, particularly in Mexico, is becoming an increasingly popular answer for US firms who are struggling with a labour shortage. US companies are looking south of the border as they search for new ways to stay profitable. A big push to nearshore in Mexico comes from the labour market, but Veronica Quintana, Director at CBIZ, finds that strong cultural links between Mexico and America are also adding to the allure.
“We increasingly have more clients coming to us looking for advice on nearshoring,” she said. ‘Some still have family in Mexico and they want to invest in their hometowns. I have seen an uptick in US businesses wanting to invest in tequila and spirits. However, US firms across the board are finding it difficult to be profitable due to the rising costs of materials and labour. They have mentioned that perhaps it is best to invest in Mexico, where the labour market is cost-efficient and highly motivated.’
Labour shortages in the US and the push for nearshoring
There is a national labour shortage in the US. Many baby boomers are retiring, and others left the workforce during the pandemic. Offshoring can look different for each company, depending on the industry and their reasons for offshoring.
‘Companies are mostly looking to reduce or optimise costs, access specialised skills, staff augmentation, and effective scaling,’ said Quintana. ‘Offshore employees are often more flexible, which is important if business conditions change, and they need to downsize quickly and efficiently.’
Mexico’s skilled workforce and competitive advantage
Mexico has a skilled workforce with lower labour costs, and Quintana pointed out that this is especially true in the manufacturing industry.
‘The close proximity to the US also makes it easier to transport goods and materials quickly and at a cost savings,’ she said. ‘The United States-Mexico-Canada Agreement (USMCA) provides several benefits, such as reducing or eliminating tariffs, US firms turn to nearshoring for labour streamlines customs procedures, and provides market access to a large consumer base.
India as a growing offshore destination
India is another country that has seen an increase in offshoring. They also have a talented labour force, especially in the business field, and CBIZ has personal experience here that it can draw on to help clients.
‘We have had success offshoring some our income tax preparation to India,’ said Quintana. ‘We have worked with their team for several years now, trained them on our processes, software and procedures. They do good quality work, and that gives us the confidence and assurance that offshoring has been a success.’
Rising Appeal of Nearshoring
The pandemic and growing instability in the world’s geopolitics has also pushed nearshoring up the list of priorities for US companies. The disruption to supply chains during the pandemic made the thought of investing in manufacturing sites closer to customers much more attractive. More recently, Russia’s invasion of Ukraine and growing tensions between Washington and Beijing have made nearshoring even more of a priority.
The economic impact of nearshoring on Mexico
Over the past few years, nearshoring from the US has created a boom in Mexico. US imports from Mexico totalled US $455 billion in 2022, up nearly 19% from the previous year and up 64% from 2012, according to the United States Census Bureau. At the same time, the share of Mexico’s imports from China went from 1% in 1994 to 20% in 2022 according to a recent study by academics Laura Alfaro and Davin Chor.
New manufacturing plants could add an additional 3% to the country’s GDP over the next five years as well as over 1 million jobs, according to a recent study by Deloitte.
New manufacturing plants could add an additional 3% to the country’s GDP over the next five years as well as over 1 million jobs, according to a recent study by Deloitte. The Mexican government is cashing in by making the country’s tax laws more favourable to foreign companies. For instance, as of October 2023, international electric vehicle manufacturers could claim an 86% tax deduction on investments in the country.
Challenges for investors
US investors have been made nervous, however, by a bill of judiciary reforms that has been passed by the Mexican government, that makes Mexico the first country to allow judges to be elected rather than appointed.
Several big-name investors have come out against the reforms, including US investment banking giant Morgan Stanley. More recently, Julius Baer warned that rating agencies could change Mexico’s creditworthiness as soon as next year if the judicial reform is approved. But Mexico’s outgoing president Andrés Manuel López Obrador has hailed the approval of controversial reforms, saying they would be an “example to the world”.
Obrador who left office on October 1, 2024, accuses the current judicial system of serving the interests of the political and economic elite. ‘It’s very important to end corruption and impunity,’ he said.
Future prospects for US firms in Mexico
Investors will be watching the market closely, as energy and tax reforms would stall the nearshoring boom if they are not followed through. But US firms seem to be happy to be moving South, for now.
Pretino P. Albury, CPA, CA, is a partner with over twenty years of experience in public accounting and advisory services. He has a diverse background, having worked across various industries, including financial services, power and utility, tourism and leisure, and consumer business. Pretino is a former Big 4 auditor and advisor, specializing in risk management and controls. He has served clients in The Bahamas, throughout the Caribbean, and the United States. Pretino is a member of the Bahamas Institute of Chartered Accountants and is the incoming president of the Institute.
Compliance challenges of Bahamas Business Licence Act
On 1 July 2023, The Bahamas introduced significant regulatory changes with the Business Licence Act 2023, imposing new compliance requirements on businesses, particularly in key sectors. The first year of the legislation has exposed significant compliance gaps in mid-market businesses, creating an audit bottleneck.
Pretino Albury, Partner at Kreston Bahamas and President of the Bahamas Institute of Chartered Accountants (BICA), explains the challenges the update has uncovered.
Businesses affected
The amendments to the Business Licence Act specifically address large companies with annual revenues of $5 million or more, which represent about 1% of business licence registrants. These reforms aim to ensure that the largest businesses are taxed appropriately, while 91% of smaller businesses— those reporting revenues under $100,000—remain unaffected by these changes.
Increased scrutiny
By the first quarter of 2024, officials at The Department of Inland Revenue (DIR) reported that up to 20% of Business Licence filings were under additional scrutiny. Albury noted the strain this put on the system, stating: “The audits revealed internal control and process deficiencies in many businesses, especially private companies that had outdated practices.”
Challenges with initial compliance and audits
During the rollout, businesses encountered significant difficulties, particularly with the mandatory audit requirements. “BICA and the Bahamas Chamber of Commerce urged for a delay in mandatory audits, citing a lack of preparedness among businesses and the accounting profession,” Albury explained. Although a one-year delay was denied, the DIR granted a six-month extension for audits, with a new deadline of 30 June 2024.
However, even with the extension, many companies struggled to meet the deadline, leading to an overwhelming number of requests for additional time. “Approximately 75% of companies required further extensions, justifying our initial request for a longer delay,” Albury added. As a result, audits extended into October and November 2024, far beyond the initial April deadline.
Internal control deficiencies
The audit process uncovered significant deficiencies in internal controls across a range of businesses. “Many companies were still using outdated accounting methods from 15 to 20 years ago, and some were not compliant with International Financial Reporting Standards (IFRS),” Albury stated. This was particularly true for private companies, many of which had not previously faced such stringent oversight. “The findings were a wake-up call for larger companies in particular,” he added.
Positive steps
Despite these challenges, the audits also provided opportunities for improvement. Auditors made recommendations to strengthen systems and processes, leading to long-term enhancements. “These findings, though surprising to many businesses, have Bahamas Business Licence Act throws mid-market a compliance challenge resulted in significant recommended remedies,” Albury commented. If implemented, these changes are expected to have a lasting positive impact on business operations and compliance.
Future deadlines
Looking ahead, concerns about future audit deadlines persist. BICA is recommending another extension for the 2025 filing period, proposing that the deadline be moved from April to June. “We anticipate that another year of mandatory audits will put pressure on both accountants and businesses,” Albury warned. However, he remains optimistic: “While businesses and accountants have faced challenges, the process has led to positive recommendations, ensuring better preparedness in the coming years.” Albury concluded: “The real test will be determining whether these audits increase business licence revenue or confirm that companies were already compliant.
With an election within weeks and an economy that looked set to falter in August, the US market could be forgiven for adopting a wait-and-see attitude. This is somewhat adrift from the optimistic results of the latest mid-market research report conducted by Kreston Global in February 2024, which saw 94% of US respondents expecting to see an increase in international business this year.
Low growth, high optimism
We spoke to Jan Smallenbroek, Managing Director and National Leader of the International Tax & Transfer Pricing Practice at CBIZ, Kreston Global’s US firm, to shed light on how mid-market businesses are taking the economic headwinds, and the answer is, in their stride. “Most of the companies I work with have an international footprint. They are active in multiple countries. They’ve been there for years. If companies have reached a certain level in the US and they want to grow, they need to go outside the US in order to be able to expand and that’s why they go to Canada, they go to Asia, they go to Europe.”
Keeping Pace
Although business growth appetite is still the same, there has been a few distinct changes in the way American businesses are planning expansion, according to Jan; “We’re seeing a trend where some of our larger clients are moving their manufacturing operations away from Europe and China to other countries like India and the Philippines,” Jan notes. This shift is driven by the need for cost efficiency. For mid-market businesses, these strategic decisions are vital for sustaining growth in an increasingly competitive global market.
Billion dollar challenges
Jan works across many mid-market clients, from in the millions of dollars, turnover to in the billions, and the conversations with clients across the whole of the mid-market strike a similar tone, ‘Whether you work for the largest multinationals in the world, or you work for a mid-sized company with an international footprint, with a revenue was $1 billion instead of $30 billion, the issues are the same. The difference is the dollar amount.”
This is why the CBIZ transfer pricing team has seen significant growth over the last few years, hiring experts that have experience dealing with billion-dollar challenges. Jan himself worked with a large multi-national brand for 10 years as an adviser, helping set up their shared service centres, procurement companies and European headquarters. “When you compare CBIZ’s International Tax and Transfer Pricing practice today to where it was two years ago, we’ve seen annual growth of approximately 35% to 40%. That’s a remarkable achievement.”
Pillar Two
The global tax environment is undergoing significant changes, particularly with the introduction of the OECD’s Pillar Two framework. This new set of rules is designed to ensure that multinational enterprises pay a minimum level of tax, regardless of where they are headquartered or operate. Jan highlights that Pillar Two is not just a regulatory requirement but a strategic challenge that mid-market companies must address.
“Pillar Two is here to stay, and companies have to deal with it,” Jan emphasises. While larger companies may have already begun implementing these changes, many midmarket firms are still in the assessment phase. CBIZ has positioned itself as a key partner in this process, offering tools and expertise to help companies navigate the complexities of Pillar Two compliance.
Tax confidence
Another surprising result in the recent Kreston Global mid-market survey was the confidence mid-market business leaders feel when dealing with global tax rules, with 98% of US respondents feeling confident about their experience. Jan’s experience working with both U.S. and European multinationals means he can offer some insight on why that confidence might exist in the US. Multinationals he works with now in the U.S. tend to have smaller tax departments, “U.S. multinationals rely a lot more on service providers than European multinationals,” Jan notes. This reliance creates opportunities for firms like CBIZ to provide comprehensive tax services, especially as U.S. companies navigate the complexities of international expansion and compliance.
Growth strategy
The recent news that CBIZ has acquired billion dollar national accountancy and advisory firm Marcum hints at CBIZ’s ambition. Jan underlines an appetite from the mid-market multinationals to move away from the pricing and operation model of the Big Four to companies like CBIZ. “One example that highlights the value CBIZ brings is our relationship with a billion-dollar company in the energy drinks sector. Two years ago, this company operated in 10 countries, but they now aim to expand into 40 within the next two to three years. The CFO, recognised some of the common challenges I had faced at other, much large expanding multinationals. He said, why would I go to the Big Four if I have a guy sitting here who’s probably more experienced in dealing with consumer product companies and half of the rates thanks to the agile way we approach client management. I think that’s a pretty powerful proposition.”
News
Global SME success pathways – Interpreneur Report
September 24, 2024
The 2024 Interpreneur report from Kreston Global revealed vital insights into how small and medium enterprises (SMEs) can succeed globally, focusing on the UK as a business hub. In a recent article for the International Accounting Bulletin, Liza Robbins, Kreston Global’s chief executive, highlighted that the new Labour government under Keir Starmer has introduced several initiatives to drive growth. Still, uncertainty lingers over how these will affect international business prospects. Read the full article here, or read a summary down below.
Legislative shifts shaping business strategy
The government’s central goal is to stimulate economic growth by attracting investment into the UK and making the country more business-friendly. Key legislation, such as the Audit Reform and Corporate Governance Bill, will influence businesses by emphasising digital transformation and data management, even though it mainly targets larger corporations. Another significant proposal, the Employment Rights Bill, aims to enhance worker rights, introduce a new National Living Wage and place restrictions on dismissals and outsourcing, prompting businesses to reassess their cost management strategies.
Increasing role of AI
Robbins notes the increasing role of Artificial Intelligence (AI) in business and how the UK government plans to address its development. While there was no immediate introduction of an AI Bill, the anticipation of future legislation in this area is a call for businesses to prepare for potential changes. This future legislation is expected to regulate AI, further impacting businesses, and SMEs should be ready to adapt.
Tax policy is another concern, as UK growth projections suggest that the government may need to increase business taxes. For now, the Starmer government has avoided raising income tax, national insurance, or VAT. Still, the need for revenue will likely lead to future fiscal adjustments that could affect foreign investment decisions.
Opportunities amid economic volatility
According to the Interpreneur report, Western Europe remains a key region for business expansion, with the UK still attractive to international investors, despite its increasing divergence from its European neighbours. This divergence, however, could present unique growth opportunities for entrepreneurs, who prioritize growth opportunities over other factors such as government incentives or network security. This dynamic poses a challenge for the UK government, as it seeks to balance growth ambitions with the need for economic stability.
The report underscores that economic volatility, exacerbated by global events like the COVID-19 pandemic, Brexit, and inflation, remains a major concern for business leaders looking to expand into the UK. Robbins emphasises that SMEs must navigate these uncertainties, particularly the impact of Brexit on supply chains, which continues to affect trade with the EU.
Building confidence for business growth
The government’s efforts to mitigate fears of instability and build stronger ties with the EU, as seen in events like the European Political Community Summit, are aimed at boosting international confidence. These efforts demonstrate the UK’s commitment to maintaining strong international relations, which is crucial for business growth. However, Robbins concludes that the real test will come with the first Budget, where the government’s economic strategy will become clearer, and potential investors can better assess how the UK plans to attract and support business growth.
For more information on doing business with Kreston Global, contact us here.
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SAN Group, Mexico City, Mexico
September 19, 2024
Background
SAN Group is a multinational corporation that operates across five continents, offering innovative solutions in animal health, crop protection, and food safety. Their business strategy centres on three key pillars: Plant Health, Animal Health, and Planet Health. This structure supports their long-term vision of contributing to a sustainable future.
With ambitions to expand into Mexico, SAN Group required the guidance of a professional services firm with both local expertise and global insight. They sought a partner who could navigate Mexico’s regulatory landscape while aligning with their global operational standards.
The Challenge
When SAN Group decided to establish its operations in Mexico, they faced several challenges. From navigating complex legal and tax frameworks to managing the operational setup, they needed a partner who could provide local insight while ensuring global business continuity. Establishing a new entity required expert knowledge of local compliance, tax regulations, and business structuring to ensure a smooth and cost-effective entry into the market.
Choosing Kreston FLS
SAN Group partnered with Kreston FLS, who provided tailored guidance from the outset. With Enrique Pastor, Partner at Kreston FLS, leading the collaboration, the firm worked closely with SAN Group’s headquarters and Brazilian teams to devise an operational structure for Mexico that minimised costs and risks while maximising benefits.
Kreston FLS advised on the optimal corporate structure, aligning with SAN Group’s global values and business strategy. They ensured compliance with local laws, provided monthly financial reports, and offered expert tax advisory services to meet the stringent demands of Mexican regulatory authorities.
Results
Since 2016, Kreston FLS has been an integral partner in SAN Group’s successful expansion into Mexico. They delivered professional and timely advice, ensuring that SAN Group’s operations in Mexico remained compliant, efficient, and strategically aligned with their global objectives. By managing financial reporting, tax advisory, and compliance, Kreston FLS enabled SAN Group to focus on their core business and growth.
“Kreston supported us in implementing our business unit in Mexico, always working with great professionalism and transparency.” – Ricardo Felix, Regional Finance Director, AMERICAS
News
Jelena Mihic Munjic
Managing Director at Kreston MDM
Jelena Mihic Munjic is a Managing Director with expertise in business strategy, finance, and leadership. A Certified Auditor and Registered Court Expert, she has served on boards like UniCredit Bank Serbia. Jelena holds a Master’s in Quantitative Finance and is a published author in business journals. She is fluent in Serbian and English.
Elena Ramirez Marin
Partner at Kreston Iberaudit
Elena Ramírez Marín currently oversees the Tax and Outsourcing areas at Kreston’s office in Catalonia, representing Kreston Global in Spain, Andorra, and Portugal. With a 30-year background in the tax and auditing sector, her career has been particularly focused on outsourcing and tax services. She holds the position of Manager at the Kreston Iberaudit International Office and is a member of the Kreston Board.
Transfer pricing impact on SMEs: Commentary for Bloomberg Tax
Increasing scrutiny from tax authorities worldwide has amplified the importance of adhering to the arm’s length principle, with recent shifts in TP practices and legislation impacting SMEs. As SMEs engage more in cross-border transactions, compliance with TP rules has become critical. High-profile cases highlight the complexities of TP regulations, as noted in Kreston Global’s “Interpreneur report.” The OECD TP Guidelines offer a framework for determining the arm’s length value of related party transactions but are non-binding, leaving jurisdictions to implement varying domestic regulations. This creates tax uncertainty, higher costs, and double taxation risks, especially for SMEs with limited resources to manage these challenges.
Recent Transfer Pricing Cases
Apple v. European Commission (2016-2020)
The EC ordered Apple to repay €13 billion in back taxes for receiving illegal state aid from Ireland. Apple appealed, and in 2020, the ruling was annulled. The case highlighted scrutiny of multinational tax practices.
Australia v. Rio Tinto (2017-2022)
Rio Tinto settled a profit-shifting dispute with the Australian Taxation Office for nearly A$1 billion. The case emphasised transparency in transfer pricing and the risks of aggressive tax planning.
Amazon v. IRS (2017-2019)
Amazon won a dispute with the IRS over the undervaluation of intangible assets, with courts ruling in its favour. The case stressed the need for solid transfer pricing documentation.
Denmark v. Maersk Oil and Gas (2018-2023)
Denmark challenged Maersk’s transfer pricing, claiming it shifted profits abroad. The case reinforced the importance of clear documentation in transfer pricing.
Fiat Chrysler v. European Commission (2015-2022)
Fiat Chrysler was accused of receiving illegal state aid. The European Court of Justice overturned the ruling in 2023, limiting the EC’s powers over tax rulings.
France v. McDonald’s (2015-2022)
McDonald’s settled for €1.245 billion with French authorities over profit-shifting to Luxembourg, highlighting the risks of aggressive tax strategies.
HMRC v. BlackRock (2012-2024)
The Court of Appeal ruled that BlackRock’s intra-group loan was primarily for tax avoidance, emphasising the need for arm’s length terms in loan agreements.
India v. Kellogg India (2021-2022)
Kellogg India won a transfer pricing dispute, reinforcing the importance of selecting the appropriate entity in analyses.
Norway v. ConocoPhillips (2019-2023)
Norway reduced ConocoPhillips’ interest expenses, ruling its loan terms were not at arm’s length. The case stressed compliance in intra-group loans.
Future Steps
As tax regulations evolve, businesses of all sizes must adapt their transfer pricing strategies to manage risks and stay compliant. The European Commission (EC) has introduced two key Directives (published September 12, 2023), the BEFIT Directive and the Transfer Pricing Directive, aiming to harmonise and simplify tax rules across the EU.
BEFIT Directive
BEFIT targets corporate groups with annual revenues of €750 million or more, aiming to standardise tax bases across the EU. It calculates a preliminary tax result from each group’s financial statements, which is adjusted and aggregated to allow for cross-border profit and loss offsets. Member States can offer additional deductions if they meet the Global Minimum Tax Directive requirements. The goal is to simplify compliance and ensure fair taxation across the EU.
Transfer Pricing Directive
This directive addresses transfer pricing issues, ensuring that intercompany transactions follow the arm’s length principle, aligned with OECD guidelines, to prevent tax avoidance. It sets rules for related entities, transfer pricing methods, and adjustments for non-market transactions.
Directive Impact
The BEFIT and Transfer Pricing Directives will reduce compliance costs, especially for SMEs, and provide greater certainty. They aim to harmonise tax rules, combat tax avoidance, and enhance competitiveness within the EU. However, these directives will only apply within EU Member States, leaving cross-border transactions with non-EU companies unaffected.
Global Developments in transfer pricing
Outside the EU, countries like the U.S., Australia, and Canada have tightened their transfer pricing regulations, increasing scrutiny and compliance costs, especially for SMEs. Globalisation and inconsistent adoption of OECD guidelines create complexities, including double taxation.
Final Thoughts
Businesses, particularly SMEs, must stay informed and agile as global tax regulations evolve. Seeking expert advice and maintaining robust compliance practices will be essential to navigating these changes.
For more information on transfer pricing, click here.
News
Shibu Abraham
HR Director, Kreston Menon, UAE
An experienced Human Resources Director who formulates and initiates talent management strategies to attract and retain exceptional people – providing an excellent work environment so that they work in tandem with the organisation’s business goals, which in turn results in client satisfaction and business performance.
Mid-tier firms emerging as attractive options for new careers
August 22, 2024
Today’s smaller accountancy firms have undergone significant transformation compared to a decade ago. The accountancy profession is evolving rapidly, with small and medium-sized practices (SMPs) leading the charge, making them dynamic and promising environments for launching a finance career. Neil Johnson, editor at ACCA Careers, recently discussed this shift with Shibu Abraham, director of HR and administration at Kreston Menon in the UAE. Access the full article here, or read a summary down below.
Exposure and Growth
Mid-tier firms are increasingly appealing to top talent by offering diverse experiences, broader responsibilities, and the chance to build meaningful client relationships, which larger firms may not provide.
Shibu Abraham notes, “Big firms always had the edge in the war for talent, but recently market dynamics have changed. We can provide exposure to diverse industries and a variety of assignments. People get the chance to wear many hats and be involved in all aspects of an assignment rather than do a bit of work on a big project. If you’re willing to roll up your sleeves, take on more responsibility and upskill to better service clients, mid-tier firms offer unparalleled growth opportunities. With us, you get to become our clients’ trusted partners.”
Credible brands
At Kreston, mentoring and feedback are highly valued and informal and personal, as opposed to rigid or overly structured. “The partners and managers are inclined to support the growth of young professionals in their teams,” says Shibu. “You don’t have to wait for the annual performance reviews to analyse training and development needs. As the projects are short-term compared to large firms, interim and assignment-based performance appraisals are possible. The pat on the back matters.”
Competitive salaries
While small firms may struggle to match their larger counterparts in salaries, mid-tier firms are beginning to see parity. “Our salaries and benefits are almost on par, or at times better than the largest firms for the right talent,” shared Shibu. “We do understand that there is a cost involved in attracting and retaining talent, and we are up for it.”
Shibu highlights how mid-tier firms are increasingly competitive in compensation, recognising the importance of investing in top talent to attract and retain skilled professionals.
News
Anna Kupprion
Tax Consultant at Kreston Bansbach
Anna Kupprion is a Tax Consultant at Kreston Bansbach (Germany). She starts her career at a Big Four accounting firm and joined Kreston Bansbach in 2017. She provides expert advice on international tax issues (particularly transfer pricing) and also works on international tax questions such as double taxation agreements and withholding tax and can assist you in the best possible way.”
Andreas Katz
Tax advisor and certified public accountant, Kreston Bansbach
Andreas studied economics at the university of Hohenheim (Stuttgart) and graduated as Diplom-Ökonom (Master in economics). He joined Kreston Bansbach in 2010 starting in audit. After passing the examinations as tax advisor and certified public accountant he moved to the tax department of Kreston Bansbach in 2015 and since then focuses on international taxation, in particular transfer pricing, for a wide variety of clients from different industries. His main areas of work include transfer pricing planning, transfer pricing documentations, supporting clients in tax audits and overseeing mutual agreement procedures. Besides transfer pricing he also works on other international tax questions, for example relating to double taxation agreements and withholding taxes, issues of national taxation in Germany as well as due diligence and mergers & acquisitions.
Transfer pricing in Germany: Prepare for tax audits
Recent amendments to transfer pricing in Germany have brought significant changes to the country’s procedural law, particularly affecting transfer pricing documentation requirements.
These new regulations will take effect:
For all tax periods beginning after December 31, 2024 and
For all tax audits initiated after January 1, 2025
Given that prior tax periods, including those as far back as 2018, may still be subject to tax audits in 2025, these new regulations have a broad scope, making it imperative for taxpayers to be fully informed and prepared.
Key changes to transfer pricing in Germany
On-demand transfer pricing documentation
Previously, transfer pricing documentation was generally requested only during tax audits, with a 60-day deadline (or 30 days for extraordinary transactions) following a tax auditor’s request. The new regulations empower tax authorities to request transfer pricing documentation at any time, even outside of a formal audit and without specific cause. German companies with cross-border transactions must now be prepared to provide transfer pricing documentation at any time.
Reduced submission deadlines
The current 60-day deadline (30 days for extraordinary transactions) to submit requested transfer pricing documentation will be reduced to 30 days under the new rules.
Mandatory submission during tax audits
During a tax audit, taxpayers will no longer receive a separate request for transfer pricing documentation. Instead, they must submit the documentation within 30 days of the tax audit announcement, which could be well before the auditor actually begins their review. This change necessitates that taxpayers prepare their documentation in advance, as the 30-day window is unlikely to allow sufficient time for adequate preparation. Extensions will only be granted in exceptional cases.
Stricter penalties for non-compliance
The new regulations impose stricter penalties for delays or failures in submitting transfer pricing documentation. Previously, surcharges were rarely enforced due to auditor discretion. However, under the new rules, discretion is significantly reduced. If documentation is not submitted or is deemed unusable, surcharges of 5%-10% of the additional income (with a minimum of EUR 5,000) may apply. Late submissions may incur surcharges of up to EUR 1 million, with a minimum of EUR 100 for each day the deadline is exceeded. Furthermore, failure to provide documentation and unusable documentation could result in the tax authorities estimating the tax base, potentially leading to substantial additional tax liabilities.
Recommendation
We strongly advise reviewing the applicable thresholds in Germany for the preparation of transfer pricing documentation (including master and local files) if your German entities engage in cross-border transactions with related companies, especially for years not yet audited.
If these thresholds are exceeded, it is prudent to prepare the necessary documentation in advance to ensure compliance with the 30-day submission deadline once an audit order is issued after December 31, 2024.
Master-file
Local-file
German thresholds
Individual turnover of the German company > EUR 100 million
Total consideration for deliveries> EUR 6 million and/or total remuneration for other services (e.g. services, loan relationships, licenses, interests, etc.) > EUR 0.6 million
Please note, the deliveries/services received and those provided must be added together. Only cross-border transactions with related parties are to be included in the thresholds. Transactions between domestic members of a group are not relevant.
If you are interested in doing business in Germany, please contact us here.
News
Mersen Oceania and Bentleys Victoria, Australia
August 21, 2024
In Australia, Mersen Oceania has operated for over 65 years, with Financial Controller Slobodan Brzica, who has 25 years of experience, overseeing the financial operations. Mersen, a global leader in electrical power and advanced materials, has been serving high-tech industries for over 130 years.
Mersen Oceania’s new auditor
When Mersen Oceania sought to appoint a new external auditor, they needed a partner who understood their complex business, provided expert auditing services, and offered value for money. The transition to a new auditing partner was critical, as it had to ensure continuity and compliance with the strict reporting deadlines set by Mersen’s global headquarters.
Choosing Bentleys Victoria
Bentleys Victoria was selected as the new auditing partner due to its robust auditing expertise. Bentleys Victoria developed a detailed project plan that focused on conducting a comprehensive audit while adhering to the necessary reporting deadlines, incorporating technology to streamline the audit process and established clear timelines to meet all global reporting requirements efficiently. From the outset, Bentleys Victoria demonstrated a deep understanding of Mersen Oceania’s operations and their approach provided valuable insights and recommendations that were well-received by Mersen’s Board of Directors. Slobodan Brzica commented: “Impressive. The team is dynamic and we are pleased with the recommendations and suggested actions.”
Ongoing support
A key factor in the success of this partnership has been the continuity of Bentleys Victoria’ team, which has allowed for the retention and sharing of critical knowledge. This consistency ensures that even as team members change, the quality of the audit remains consistently high, supported by a strong technical foundation and an intimate knowledge of Mersen Oceania’s business. Bentleys Victoria successfully met the tight global reporting deadlines, completing the audit within two months. Their efficient and effective service delivery continues to support Mersen Oceania’s commitment to innovation and excellence.
Slobodan Brzica concluded: “The transition was impressive and their understanding of our business was evident from the start. They are a team of real professionals and switched on.”
CBIZ to acquire Marcum, strengthening market position
August 5, 2024
CBIZ’s acquisition of Marcum will open new territory for Kreston members while furthering its technology offerings. The CBIZ/Marcum deal will make the company the seventh-largest accounting services provider in the US, surpassing Grant Thornton. The merger will bring 35,000 new clients to CBIZ, as well as new services through innovative technology.
‘Marcum has solid industry expertise, bolstering our knowledge in key industries,’ said Chris Spurio, President of Financial Services at CBIZ. ‘This means our ability to provide solutions for clients along industry lines is greatly enhanced. We can expand our footprint in terms of the kind of clients we can service.’
Marcum’s clients new to CBIZ will need the services that Kreston members can provide. ‘Marcum has a strong growth culture, and it has been at the forefront of technology innovation,’ said Spurio.
Upon close, the acquisition will also put CBIZ back into the public company sector. CBIZ exited this area as it simply did not have the scale, but through Marcum, it will have a USD 150 million practice that has the scale and expertise to make the combined company a major player.
Joining forces with Marcum will also help CBIZ win the war for talent. A skills shortage is dogging every accountancy market worldwide. Firms need to be as innovative with what they offer their staff as they do their clients and elevating the CBIZ brand is going to make the firm much more appealing to talent. ‘We are now going to be able to provide enhanced career paths and more opportunities to new and existing staff,’ said Spurio. ‘We are offering technology and offshore resources that other firms will find very hard to match and this is key, because a lot of people are leaving because of burnout.’
Spurio pointed out that both CBIZ and Marcum have an excellent staff retention rate, which he attributes to a good corporate culture of valuing their teams. Both companies plan to combine their training programmes and take the most effective strategies they have to help staff improve their skills. ‘Ultimately, a stronger brand means better opportunities for our staff,’ said Spurio.
‘They are now going to be able to branch out into more sectors and use a wider skill set that will give them much more career satisfaction.’
The Marcum acquisition is the most significant transaction in CBIZ’s history. At closing, the company will have a combined annual revenue of approximately USD 2.8 billion, more than 10,000 team members and over 135,000 clients.
If you want to speak to one of our experts in the North American market, please get in touch.
News
Asia Pacific Conference 2024
July 11, 2024
Kreston Global and Kreston VN successfully hosted the Asia Pacific Conference 2024 from July 4-6 in the vibrant city of Hanoi, Vietnam. The event united Kreston colleagues from across the Asia Pacific region and beyond to foster relationships and share insights into new ways of working and client collaboration.
Warm welcome in Asia Pacific
The conference kicked off on the evening of 4 July with a welcome dinner. Attendees gathered at the JW Marriott Hanoi, setting the stage for a warm and convivial atmosphere. This initial gathering allowed participants to reconnect and network in a relaxed setting.
Insightful business sessions and networking
The main business program commenced on 5 July, starting with welcome remarks and an overview of Kreston VN from Dung Nguyen Hoang, Managing Partner. The morning sessions included a “How to Do Business in Vietnam” presentation by Nhung Chu, Partner at Kreston VN, featuring case studies and an engaging Q&A session. This was followed by keynote speaker Lim Chor Ghee, INED (Chairman, Kucingko Berhad Cofounder, IMM Group/Be Better Foundation), who offered thought-provoking insights into the region’s business landscape and economic drivers of trade.
The conference continued with a strategic update from Liza Robbins, Chief Executive of Kreston Global. New firms, Kreston Thailand and Helmi Talib, were then introduced to the network. Following presentations on conflict checks and regional client management, the conference then broke for lunch. After the break the Asia Pacific regional committee, chaired by Kamal Thakkar, Kreston Stanley & Williamson, shared an overview of their plans, with speakers Ganesh Ramaswamy, Helen Rivero from Kreston Proworks and Vineet Rathi from Kreston OPR. The day concluded with a group discussion and feedback session, allowing attendees to voice their ideas and suggestions.
Specialised breakout sessions and cultural exploration
The final day, 6 July, featured focused breakout sessions for Audit (hosted by Kamal Thakkar, Kreston Stanley & Williamson) and Tax (hosted by Mark Taylor, Chair of the Global Tax Group) groups, providing a platform for specialised discussions and knowledge exchange. Closing remarks (from NAMES) summarised the key takeaways from the conference.
The conference concluded with a tour of Hanoi, allowing attendees to explore the city’s rich history and culture. This further strengthened the bonds formed over the past few days. A wonderful time was had by all with many follow ups and great connections having occurred.
Kreston Global members can access the conference photo album and presentations by clicking here, and see the upcoming events Kreston Global events by clicking here.
News
Ricardo Gameroff
Partner, Kreston BA Argentina, Argentina
Ricardo is a fraud, audit and risk expert with over two decades at Ernst & Young (EY), where he served as an Audit and Forensics Partner across Canada, Chile, and Argentina. He led major clients in utilities, retail, manufacturing, and mining sectors, including Coca-Cola, McDonald’s, Siemens, Fluor Daniels, and others. Ricardo is a Certified Public Accountant (CPA) in the United States, Chile, and Argentina, a Certified Fraud Examiner (CFE), and holds an MBA designation. He’s also a university professor at Universidad de los Andes and a published author on occupational fraud.
Internal audit in the age of cyber threats
June 10, 2024
Ricardo Gameroff, Managing Partner at Kreston BA Argentina and Global Audit Business Development Director at Kreston Global, emphasises the crucial role of internal audit in combating cyber threats. His article in the Audit & Risk magazine, the Chartered IIA’s publication, discusses how evolving internal audit practices enhance resilience against threats like ransomware, phishing, BEC attacks, and brand impersonation through meticulous risk assessment and proactive monitoring. Click here to access the complete publication, or read the summary below.
Internal audit as a defensive tool
Internal audits have always played a key role in mitigating cyber risks and protecting organizational assets. Moreover, recent advancements in auditing processes have expanded its capabilities beyond traditional methods. Now, internal audit teams can leverage innovative technologies to adapt quickly to evolving cyber threats.
Key recommendations for internal audit teams:
Continuous monitoring: Use automated tools and analytics to monitor network activity, detect anomalies, and identify potential security breaches in real time.
Enhance cyber security skills: Invest in ongoing training and professional development to keep up with emerging threats and best practices.
Integrate data analytics: Use data analytics to improve risk assessment and detect suspicious activities by analysing large data sets for patterns and anomalies.
Collaborate with IT and security teams: Work closely with IT and security departments to understand the organisation’s IT infrastructure and vulnerabilities, tailoring audit procedures to the risk profile.
Ethical artificial intelligence
A strong understanding of ethics and a robust corporate culture are crucial for protecting organizations against cyber threats. Additionally, internal audits can help management monitor and support organizational culture. Consequently, this ensures all employees understand expected behaviors regarding cybersecurity and ethics. This fosters good decision-making and strengthens governance and controls.
With the rise of AI in decision-making and automation, ensuring transparency, accountability, and bias-free systems is essential. Furthermore, internal auditors can aid in implementing ethical AI practices by auditing AI algorithms and ensuring regulatory compliance. Early involvement in AI initiatives allows auditors to advise on risks and suggest solutions.
Components cyber preparedness
Preparation is key in combating cyber threats. Establishing enterprise cyber preparedness involves governance, strategy, incident response, and employee training.
Governance and strategy: Internal audit should support and advise on effective cyber security management, helping to establish clear policies, procedures, and accountability structures. Defining roles, responsibilities, and strategic objectives aligned with business goals is crucial.
Risk assessment: Regular risk assessments help identify and prioritise cyber risks, allowing for efficient resource allocation and targeted mitigation strategies.
Incident response: Organisations need a formal incident response plan with designated teams and regular training exercises. Proactive measures like threat intelligence monitoring and incident detection systems are essential for swift and effective responses.
Employee training: Educating employees on cyber threats and best practices is vital, as human error remains a common cause of incidents. Regular training on phishing, password security, safe internet usage, and security awareness campaigns fosters a culture of vigilance.
Internal audit preventing incidents
It’s difficult to find examples of internal audits preventing cyber security incidents, as “near misses” aren’t publicised. However, successful cyber attacks often highlight how effective audit practices could mitigate or prevent breaches.
In the automotive industry, the 2023 Tesla data breach affected over 75,000 individuals due to an “inside job” by two former employees. This incident underscores the importance of comprehensive employee training, stringent access controls, regular audits, and whistleblower policies to detect unauthorised access and risky behaviour.
In the financial services sector, the March 2017 Equifax data breach, which affected nearly 150 million people, resulted from attackers exploiting IT system vulnerabilities. Additionally, while external attacks are complex to prevent, internal audit teams focusing on robust cyber security measures, data management practices, and internal controls can help detect breaches quickly and ensure swift damage mitigation and notification.
Mailchimp, a provider of email marketing services, has faced numerous data breaches due to social engineering attacks on its employees, resulting in compromised user accounts and customer data exposure. Internal audits should ensure employees receive adequate cyber security training and assess the implementation of two-factor authentication and practical identity management practices. Additionally, policies and systems must be in place to detect and mitigate vulnerabilities swiftly and promptly address breaches.
As technology evolves rapidly, so do the associated risks. Internal audit must adapt its practices and utilise technology advancements, such as AI, data analytics, and machine learning, to proactively identify potential vulnerabilities and predict emerging threats. Internal audit teams capable of foreseeing future risks can provide valuable guidance to management, positioning the organisation optimally to respond to inevitable cyber-attacks. For more information on implementing cyber security protocols into your business, click here.
Kayode Oni is an accomplished finance analyst with a proven track record of accounting and consulting. Experienced in finance, accounting, financial analysis, investment appraisal, tax laws and regulations, consulting, project management, and data analytics, Kayode is a valuable asset in the financial sector at Kreston Pedabo.
With over 12 years of experience spanning diverse sectors such as financial services, real estate & hospitality, consumer markets, and oil & gas, Tyna Adediran is a resourceful and self-motivated Business Analyst and Management Consultant. Specialising in areas like Strategy Design & Execution, Project Management, and SME Transformation, she is known for her strong skills in data collection, diagnostics, and critical thinking. Beyond her professional expertise, Tyna is a passionate advocate for continuous learning, sustainable business practices, and youth empowerment, reflecting her commitment to making a positive impact on both the business world and society at large.
Kreston Pedabo on the Africa Industrialisation Agenda
May 9, 2024
Nigeria’s role in Africa’s industrialisation
Nigeria is a critical force in Africa’s ambitious Agenda 2063, a sweeping blueprint for the continent’s sustainable socio-economic transformation. Nigeria has achieved significant milestones in the plan’s first ten years, Kayode Oni and Tyna Adediran from Kreston Pedabo, explore the integral contributions and the broader implications for international businesses considering African markets.
Africa’s Agenda 2063
Agenda 2063 is Africa‘s development blueprint for inclusive and sustainable socioeconomic growth and development. African Heads of State and Governments adopted the continental agenda during the golden jubilee celebrations of the Organisation of African Unity (OAU)/African Union (AU) in May 2013. Agenda 2063 seeks to deliver on seven development aspirations, each with its own goals to move Africa closer to achieving “The Africa We Want.”
The blueprint contains key activities to be carried out in five Ten-Year implementation plans, ensuring that Agenda 2063 delivers quantitative and qualitative transformational outcomes for Africa’s people over a 50-year timeframe.
10-year plan
The implementation of Agenda 2063 at continental, regional, and national levels has progressed steadily during the reporting period. This is attributed to remarkable progress and achievements made towards the realisation of several goals and targets of the First Ten-Year Implementation Plan of Agenda 2063. The data in the second continental progress report on the implementation of Agenda 2063 indicates that Nigeria has achieved a 40% score concerning the goals set for the seven development aspirations. This marks a significant increase of 208%, up from the 13% recorded in the first continental progress report on implementing Agenda 2063.
Key areas where Nigeria has contributed significantly to the implementation of Agenda 2063 include:
• Increased access to internet and electricity • Reduced under-five mortality rate • Increased access to anti-retroviral treatment • Increased women’s access to sexual and reproductive health services • Reduced prevalence of underweight among under-five children • Reduced the proportion of Official Development Assistance (ODA) in the national budget • Reduced unemployment rates • Increased real GDP per capita and annual GDP growth rates • Increased enrolment in pre-primary, primary and secondary schools • Increase in the proportion of the population with access to safe drinking water and safely managed sanitation services. • Increase in the share of manufacturing in GDP.
Key beneficial legislation for international businesses
No specific, unified legislation applies to all international businesses looking to expand into Africa. The legal landscape in Africa is diverse, and each country has its own set of laws, regulations, and policies governing international business activities.
However, some regional economic communities in Africa/Trade blocs, such as the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (AfCFTA), have taken steps to harmonise certain aspects of business laws among member states to facilitate trade and investment. International businesses aiming to expand into Africa typically need to navigate a range of legal considerations, including investment laws, taxation, employment laws, industry-specific regulations, trade agreements, intellectual property laws, and local content laws, among others.
Businesses must conduct thorough due diligence and seek legal advice tailored to the country or countries in which they plan to operate. Additionally, regulations and business environments can change, so it is advisable to consult legal experts with the most recent and relevant information.
A focus on Nigeria
In Nigeria, however, efforts have been made to attract foreign direct investment (FDI) through its investment promotion agency, the Nigerian Investment Promotion Commission (NIPC). The NIPC Act provides the legal framework for investments in Nigeria and incentivises investors in various sectors. The Federal Government of Nigeria has adopted rigorous efforts to ensure that areas of concern for foreign investors, such as bureaucratic red tapes, incorporation processes, taxation, capital repatriation, and visa policies, are relaxed to the fullest extent possible to open up Nigeria’s economy to fair competition and prosperity.
Consequently, in line with the NIPC Act 22, the Nigerian Investment Promotion Commission regularly consults with crucial Government agencies to negotiate specific incentive packages in identified strategic areas of investment interest. These consultations have led to an increasingly attractive business environment with tax holidays for pioneer companies producing exportable goods, newly established industries in manufacturing, or expansion of production in sectors vital to the economy. The Government also grants non-tax incentives to non-pioneer firms in addition to industry-specific incentives.
NIPC Act
Section 24 of the NIPC Act provides that a foreign investor in an enterprise to which the Act applies shall be guaranteed unconditional transferability of funds through an authorised dealer in a freely convertible currency of:
• dividends or profits (net of taxes) attributable to the investment; • Payments in respect of loan servicing where a foreign loan has been obtained; and • The remittances of proceeds (net of all taxes) and other obligations in the case of the sale or liquidation of the enterprise or any interest attributable to the investment.
Foreign Trade Zones
Foreign investors can set up businesses directly in Free Trade Zones (FTZs) without incorporating a company in the customs territory. Registered companies may also apply as a separate entity to operate in an FTZ that would append the company’s name with the FZE (Free Zone Enterprise) suffix to gain the FTZ benefits.
FTZ incentives include: • Exemption from all Federal, State, and Local Government Taxes, Rates, and Levies. • Duty-free importation of capital goods, machinery/components, spare parts, raw materials, and consumable items in the zones. • 100% foreign ownership of investments. • 100% repatriation of capital, profits, and dividends. • Waiver of all import and export licenses. • One-stop approvals for permits, operating licenses, and incorporation papers. • Permission to sell 100% of goods into the domestic market (in which case applicable customs duty on imported raw materials shall apply). • For prohibited items in the customs territory, free zone goods are allowed for sale provided such goods meet the requirement of up to 35% domestic value addition. • Rent-free land during the first 6 months of construction (for Government-owned zones).
To speak to one of our experts in Nigeria, please get in touch.
News
Helmi Talib elected to ISCA council
May 8, 2024
Our new member firm, Helmi Talib LLP, recently shared the news that the firm’s Managing Partner, Mr. Helmi Talib, has been elected as one of the council members of the Institute of Singapore Chartered Accountants (ISCA).
Institute of Singapore Chartered Accountants (ISCA) is the national accountancy body of Singapore that sets the professional standards and guidelines for accountants in the country. ISCA provides training, accreditation, and membership services for its members, including chartered accountants and fellow chartered accountants in Singapore.
Mr. Helmi Talib is thrilled to join the ISCA council and is eager to play a significant role in enhancing the institute’s profile and fostering positive change for accountants in Singapore and beyond.
Helmi Talib comments, ‘I would like to take this opportunity to extend my heartfelt thank you to all of you who believed in my vision to serve. To my team at Helmi Talib LLP along with my friends, network, and connections, I stand humbled and honored of your unwavering support that brought me to this role.’
Institute of Singapore Chartered Accountants (ISCA) comments, ‘We are heartened by the support from all our members, and special thanks to all our Council Members who are volunteering their valuable time.’
Najat Moughil is a seasoned audit and consulting specialist, known for her expertise in consolidating accounts, implementing IFRS standards, and optimising financial processes. With a strong focus on enhancing internal controls and risk management, she excels in streamlining operations and meeting closing deadlines efficiently. Moughil also offers valuable support in project management, business ownership, and change management initiatives.
Morocco: A bold economic agenda
May 1, 2024
In recent years, Morocco has undergone significant transformations, positioning itself as a formidable player on the global stage. This strategic repositioning has not only altered perceptions of the North African nation but has also greatly influenced the landscape for doing business within its borders. Najat Moughil, Partner at Exco ACDEN discusses Morocco’s emergence as a global player has ushered in a wave of opportunities.
Morocco’s economic landscape: Europe and Africa
Positioned at the crossroads of Europe and Africa, Morocco plays a pivotal role in linking the economies of both continents, fostering trade, investment, and collaboration in various sectors. Morocco is member of the African Union and the leading investor in West Africa. Major Moroccan institutions such as Attijariwafa Bank, Bank of Africa, and the OCP Group, a leading player in phosphate and fertiliser production, now exert significant influence in Africa.
Concerning Europe, Moroccan exports are primarily aimed at the Old Continent, comprising approximately two-thirds of the country’s total exports. Casablanca Finance City, an economic hub hosting over 200 international companies, is crucial in Morocco’s role as a bridge between Europe and Africa. Thanks to its geographical location and political stability, strong and modern infrastructures, the implementation of ambitious sectoral strategies, highspeed industrialisation, the development of green energies and the signing of several free trade agreements with the world’s major economic players, Morocco offers a favorable environment for investing in various sectors: aeronautics, automotive, textiles, leather, agri-food and aggrotech, electronics, tourism, information technology, infrastructure and even energy.
Strategies for industrial growth
In order to strength its position as logistic hub, Morocco made important investments in logistics projects, in ports and railways. In the automotive and aeronautical sectors, Morocco’s logistical role has already grown and investments in production facilities and logistical solutions have been made. Morocco’s automotive industry, aircraft parts manufacturing and mining are traditional industries that offer important export opportunities.
Morocco is also moving forward with various policies to unleash the potential of the private sector, including reform of the vast network of public enterprises and a revision of the investment charter.
Economic impacts and infrastructural upgrades
The hosting of the 2030 World Cup will provide Morocco with a unique opportunity to extend its influence beyond the continents of Africa and Europe, as the tournament could inject up to US$ 1.2 billion into the Moroccan economy. In preparation, the country plans extensive upgrades to stadiums and infrastructure, aiming to attract investments through incentives. Tourism is also expected to boom. Banks will benefit from increased infrastructure financing, while the telecoms sector will see higher traffic and investments in 5G technology. Despite the costs, the World Cup offers Morocco a lucrative return on investment and a lasting national legacy. Such a robust economic agenda requires the implementation of complementary social reforms to ensure its benefits are equitably distributed and accessible.
Morocco’s strategic social policies
Amidst efforts to fortify businesses, a parallel consideration arises for initiatives aimed at enhancing the welfare and security of Moroccan households. The efforts have so far focused on the social sectors, with a landmark initiative to expand access to national health insurance and family allowance systems.
In recent months, the Moroccan government has officially launched the registration process for the Direct Social Support program. This program is devised to offer direct aid to families, particularly those in need, including school-age children, children with disabilities, newborns, economically vulnerable families, and those supporting elderly individuals. The program’s aim to improve socioeconomic conditions will foster economic stability, benefitting businesses operating in the country.
The Moroccan authorities remain committed to an ambitious program of structural reforms designed to put Morocco on a more solid and equitable growth path.
Morocco’s sustainable journey: Leading in renewables and environmental initiatives
The government’s commitment to social welfare is paralleled by its ambitious environmental agenda. Just as the Direct Social Support program aims to uplift Moroccan households, the “Morocco Offer” seeks to elevate the country’s standing in the renewable energy sector, thereby securing a sustainable future for all its citizens. On 11 March 2024, the Moroccan government made an official announcement unveiling the “Morocco Offer,” aimed at nurturing the growth of the green hydrogen sector. Prime Minister released a circular outlining a framework of incentives and assistance for potential project developers. This proposition targets investors keen on manufacturing green hydrogen and its byproducts and has attracted approximately a hundred domestic and international investors.
Renewable energy sector advancements
Morocco possesses significant potential for advancing its renewable energy sector, thanks to its abundance of wind and solar energy resources. With the world’s largest photovoltaic plant already in operation, the North African nation is committed to swiftly reducing its carbon footprint. Furthermore, prominent Moroccan companies such as OCP Group, demonstrate remarkable commitment to integrating renewable sources of water and energy into their production processes.
Morocco’s sustainable goals
The alternative energies, energy efficiency and the circular economy are becoming the most attractive sectors in Morocco. In 2030, the country aims to reduce its energy consumption by 15% and to reach 52% of renewables in its power capacity.
Morocco’s strategic repositioning as a global player has significantly transformed its business landscape, attracting an influx of international investors. With many projects in progress, such as the gas pipeline between Nigeria and Morocco, the country is poised to become an even more significant player on the global stage.
If you would like to speak to one of our experts in Morocco, please get in touch.
News
New Netherlands firm joins the Kreston Global network
De Beer is an audit and accounting firm that was established in 1952. De Beer has nine partners and 106 staff in total. It operates from two offices in the south of the Netherlands and offers audit, international and domestic tax and accounting services to a range of SME and private clients. Industry specialisms include trading, real estate and logistics.
The addition of De Beer to Kreston Global’s network further extends its European region, which consists of 62 member firms across 33 countries providing a range of financial, audit and accounting, taxation and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
Liza Robbins, Chief Executive of Kreston Global, said:
“The addition of De Beer to our large number of both Dutch and European firms is a great move. Our nine Netherlands member firms together represent over e100m in revenue and collaborate closely on clients and operational matters to share knowledge and expertise widely. It will be wonderful to see Wil and the team at our next European conference and to hear more about their plans.”
“We are really excited to have become a member of the Kreston Global network. The network has an extensive international footprint which will benefit our clients as well as our people. We have also found the Kreston Netherlands member firms extremely welcoming and we are very much looking forward to working with them closely for example on the Dutch Zero Co2-projectto support clients with ESG issues, and to meeting the rest of the network in due course.”
News
Luxembourg firm joins Kreston Global network
April 18, 2024
Kreston Global has today welcomed Luxembourg firm Global Osiris Audit & Expertise to the Kreston Global network.
The firm offers Audit and Assurance, Corporate Recovery and Insolvency services to national and international privately-owned entrepreneurial businesses across Luxembourg and across Europe. The firm deals with a variety of industries including technology, financial services, real estate, food manufacturing, hotels and consultancy organisations.
The addition of Global Osiris Audit & Expertise to Kreston Global’s network ensures a strengthening of accounting provision across its substantial European region, which consists of 61 member firms across 33 countries providing a range of financial, audit and accounting, taxation, and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
The firm will be rebranding to become Kreston Osiris Luxembourg over the next few months.
Liza Robbins, Chief Executive of Kreston Global, said:
“We are really pleased to welcome Global Osiris Audit & Expertise to our European region and our network as it brings a range of complimentary solutions for our Luxembourg service offering as well as considerable experience of operating within international networks. The firm will be a strong addition to our member firm lineup especially as it is located in such a key financial centre.”
Olivier Janssen, Managing Partner at Global Osiris said:
“We chose Kreston Global because of its member firm ethos and its great reputation for servicing entrepreneurial international businesses around the world. We can see enormous potential in our collaboration with Kreston and the network’s excellent member firms worldwide.”
News
Kreston Global announces new Singapore firm
April 15, 2024
Kreston Global has today welcomed Singapore firm, Helmi Talib LLP, to the Kreston Global network.
Established in 1992, Helmi Talib offers eight key service areas: Audit and Assurance, Tax Compliance and Advisory, Business Process Outsourcing, Liquidation and Receivership, Internal Audit, Payroll, Transaction, and Corporate Secretarial Services. For more than three decades, Helmi Talib has provided services to a wide range of clientele, the majority of which are subsidiaries of multinational organizations, and privately owned entrepreneurial businesses, under diverse sectors ranging from investment holdings, financial institutions, charities, and information technology to name a few.
The Firm was named by Singapore Business Review as one of Singapore’s top 30 accounting firms. Continuing to grow, the Firm today is led by five audit partners and five non-assurance directors supported by close to 80 staff.
Over the next few months, Helmi Talib Group will rebrand as Kreston Helmi Talib.
The addition of Kreston Helmi Talib to Kreston Global’s network further strengthens its Asia Pacific region, which consists of 45 member firms across 22 countries providing a range of financial, audit and accounting, taxation, and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
Liza Robbins, Chief Executive of Kreston Global, said:
“I’m delighted to welcome Kreston Helmi Talib to our network. Singapore serves as a major hub for our member firms in and beyond Asia, offering a dynamic business landscape which attracts our core market of companies with entrepreneurial organisations with a growth mindset. Kreston Helmi Talib’s extensive experience and client range make them both a natural fit for and a great asset to our network
Helmi Talib, Managing Partner at Kreston Helmi Talib said:
“The Kreston network has a great reputation for servicing entrepreneurial international businesses around the world, so joining the network is an exciting milestone in our professional journey. Given our extensive international client portfolio, Singapore being one of the world’s major hubs for inbound investment, we can see enormous potential in our collaboration with Kreston and the network’s excellent member firms across the globe.”
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This cookie is installed by Google Analytics. It is used to calculate visitor, session and campaign data and it also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to identify unique visitors.
_ga_M0XVMQMRZ1
2 years
This cookie is installed by Google Analytics.
_gat_gtag_UA_188891991_1
1 minute
This cookie is set by Google and is used to distinguish users.
_gat_gtag_UA_7661078_5
1 minute
This cookie is set by Google and is used to distinguish users.
_gid
1 day
This cookie is installed by Google Analytics. It is used to store information on how visitors use a website and helps to create an analytics report on how the website is performing. The data collected includes the number of visitors, the source of visitors and the pages visited in an anonymous form.
AnalyticsSyncHistory
1 month
Linkedin set this cookie to store information about the time a sync took place with the lms_analytics cookie.
CONSENT
16 years 5 months 19 days 16 hours 12 minutes
These cookies are set via embedded YouTube videos. They register anonymous statistical data e.g. how many times the video is displayed and what settings are used for playback. No sensitive data is collected unless you log in to your Google account, in that case your choices are linked with your account, for example if you click “like” on a video.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
