The Tiny Multinational
Navigating contracts and taxes as a multinational SME with Ingrid van Beuzekom
One of the most thrilling aspects of my job has been to set up and operate Fieldy as a tiny multinational. If you enjoy reading tax laws, that is… Covid has sped up services being delivered digitally and staff working remotely, but even before this, many small and micro businesses were already negotiating supply chains, contracting, staffing and taxation in an international setting. And doing so without the support services that their massive multinational big brothers can afford. That requires creativity and guts; not nouns you would normally like to associate with contracts and taxes!
Going back to 2018, when I worked in Geo Gecko, Fieldy’s Ugandan pre-cursor: we were a small geospatial services consultancy putting in a bid to carry out a bid of a detailed underwater survey of two lakes on the border with the Democratic Republic of Congo. We had to bring in a team with specialized equipment from South Africa to carry out the work. After much debate on equipment, staffing, consultants, all of those crossing multiple borders, and the various indirect taxes involved, our accountant (part of a large international firm) declared that this was basically above his paygrade. So the saga ended with me preparing a quote, tax law in hand. It didn’t pay off; the contract was won by a US firm not subject to East Africa’s punitive tax laws on imported services.
Fast forward to today, in some aspects life has become easier for tiny multinationals like Fieldy. There are Employer-of-Record service that will help you bring employees on board in countries where you are not established. Services, such as Stripe, are making a dent in automating collection of indirect taxes. Investors are using more standard types of contracts, such as SAFEs, and services have sprung up that provide standard templates that will work for most companies, such as SeedLegals do.
Nevertheless, in any Irish founder network or accelerator I have been involved in, one of the first pieces of advice you will get is: get yourself a great accountant and solicitor onboard. As good an advice as this is: it often comes at a massive cost and will not help you negotiate the murky waters of international transactions (unless you top up that retainer to include their international counterparts). Paying 10% of revenue/investment funds is no exception here. Especially solicitors are great at claiming that ‘all cases are different’. So what’s a cash-strapped founder to do? Take matters into your own hands where you can by using ‘off-the-shelf’ services and reserve the big bucks for those special situations where you really need expert advice. Wisdom is to know the difference.