According to a recent report released by Deloitte and Compliance Week, only 37 percent of U.S. corporations have a chief compliance officer. Additionally, of the firms that did employ compliance executive, 52 percent said their company has a compliance staff of five or fewer people. Considering the low level of attention dedicated to compliance, it would be especially hard for these companies to maintain adherence to the law in foreign countries if they expand or offshore operations.
Compliance issues can be a major risk
The growing number of compliance concerns can make if difficult for companies to carry out operations. The study revealed the three top issues that are making compliance a struggle for today's corporations are: few staffing and financial resources dedicated to compliance, failing to measure the success of compliance programs and set goals and problems identifying the top key compliance risks.
"Effective compliance in today's complex environment requires appropriately-sized teams of dedicated individuals to mitigate the risk of running afoul of regulations," said Nicole Sandford, national practice leader of governance and enterprise compliance at Deloitte. "While progress is undoubtedly being made by compliance departments, these results indicate that compliance executives still face difficult choices deciding what they need to prioritize with limited resources."
Dealing with regulatory compliance can be particularly troubling for manufacturing firms, which is one of the reasons why it makes sense to partner with shelter companies in Mexico. These firms can provide a team of staff members who are dedicated to making sure their clients are following all regulations in regards to accounting, tax compliance, government reporting, local vendor management, purchasing, and VAT reimbursement south of the border.
Shelter companies take care of it all
Taxes can be hard enough for American manufacturers to figure out in their local markets, let alone understanding regulations in Mexico. This is why using offshore shelter companies to handle fiscal reporting, tax payments and permanent establishment treatment when they move aspects of their organization to Mexico makes sense. Teaming up with these companies can ease the concerns of compliance executives who are constantly worried that their firm isn't operating in compliance with the regulations set out for them.
"For some companies, success depends on how effectively compliance officers can raise awareness and promote a 'culture of compliance' while also embedding compliance controls into day-to-day business processes across the enterprise," said Tom Rollauer, executive director at the Deloitte Center for Regulatory Strategies at Deloitte.
The Offshore Group: You Manufacture ... We Do The Rest