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There’s a great chance of profitability – but there are also risks involved. This is what you need to consider when your company starts to trade internationally.
“There is tremendous potential in international business, but it’s important to research the market and have the right tools for making risk assessments,” says David Kremel, Product Manager, International Risk Assessment and Compliance at Bisnode.
Many Swedish companies are looking abroad in the pursuit of profitable new business. The flow of goods and services between Sweden and abroad is on the up – and e-commerce is a key factor. “A relatively high proportion of Swedish companies trade internationally compared with similar countries. We’ve always been a major export nation thanks to our industry and natural resources. Now e-commerce is driving development and the world is getting closer. For example, we can see how trade with China is generating huge sums,” says Kremel.
The more international we become, the more important it is to find out about your foreign business partners. “After all, doing business abroad creates challenges for your company. It’s vital to understand the country you’re going into. What are the rules there? What is the market like? What concrete information is available about the company? Are the company or people linked to the company on sanctions lists?”
The issue of sanctions became particularly relevant last year when it was revealed that Swedish banks had been doing business with blacklisted people abroad. Other large Swedish corporations have also been caught up in corruption scandals around the world – and in many cases this has resulted in huge fines. “You can boil it down to this: Have rock solid control. It’s vital to know who you’re doing business with,” says Kremel. “Here in Sweden we’re used to most information being available via public institutions. Everything is digitized and accessible. But that’s often not the case in other countries. The need for information about a business partner is often brought to a head, especially outside of Europe.” Generally speaking, the further away you get from Europe and North America, the more often the public registers, to the extent that they exist, are not entirely reliable.
– Provides data and analysis on 360 million companies worldwide. Is updated with around five million new data entries every day.
– Offers a comprehensive range of international sanction lists, owner information and the opportunity to search for companies.
– Ensures that your business is compliant and fulfills statutory requirements regarding money laundering, KYC and tax rules in the countries in which your company operates, thanks to clear processes in the tool.
– Reduces credit risk and gives you secure global business relationships thanks to having the right data to make decisions – such as checks on your business partner’s business, key figures and ownership structures. Your checks are archived and searchable.
So how do you know that the company you’re doing business with abroad is reliable? According to Kremel, it’s important to obtain good technical tools for quality-assured information, such as Risk & Compliance from D&B – which can be accessed via Bisnode (see fact box). “In brief, it’s a database with data on 360 million companies in almost all of the world’s countries. Millions of data entries are added every day. It can be integrated with your own systems, and it’s easy to verify the identity of a company and the people behind the company (the ultimate beneficial owners), order credit reports and get risk assessments.”
D&B offers opportunities for larger-scale analyses if you want. “It’s possible to get comprehensive risk analyses for each country and you can dig even deeper. Info about standard payment terms and customs regarding due dates is also available. All such info helps you to understand and balance the risks.”