Share This Article
The purchase of overseas production and marketing facilities is one of those situations that can make or break your business.
This one is simple. It’s all about location and location, location, location. If you’re a company that’s based in the US, you are in a position where you can buy a factory to build a product without being taxed. If you’re an overseas company, you’re in a position where you can buy a factory and get it taxed if it’s being built in your country. That’s a big if.
The key to buying a factory and getting it taxed in the US is location. In cases like this, buying production facilities in the US can be a little risky because any tax issues will be passed on to customers.
The reason you cant buy a factory in the US is because the tax code only allows you to buy in certain industries. When you buy a factory, you can get it taxed only if it’s being used in a manufacturing industry (i.e. aircraft, electronics, medical, etc). If you buy a factory that isnt being used in such an industry, you’ll have to pay taxes.
Of course the fact that the company you buy the factory for can’t legally employ people here in the US is a big issue. But I think it is worth mentioning that the federal tax code allows you to buy a factory, but you cant buy a plant. This is because, as you might have guessed, a plant is a factory used to produce goods. So, if you buy a plant, you can’t do it in the US.
So what you end up with is a company that is a good deal less expensive to manufacture abroad than to manufacture it here in the US. Sure you can get a lower price by purchasing in the US, but it is still cheaper to import and manufacture overseas.
When you speak of companies that offer to import and manufacture goods abroad, you have to think of what you are talking about. Usually such companies are in the business of making certain goods which are exported overseas, and then, once the goods are out there, they import them to make more profit. Thus, you end up with a company that is foreign owned and is a subsidiary of a foreign company. You might also be thinking of something like Apple.
A new study from the University of California, Davis, found that companies that offer to sell goods to another country are actually more costly than companies that do the same thing but don’t sell goods to that other country. In the study, researchers found that companies that sold products to other countries were more expensive than companies that sold products to the same countries without selling the goods abroad. When you think about it, it is actually quite a reasonable analysis.
It’s a good thing the study was done by an uni… or rather UCLA. There is a lot of stuff that Apple and Google have in common with each other.
You should buy your overseas production facility from the company your local marketing department works for. In the study the researchers found that the companies that sold goods to other countries were more expensive than companies that did so without sales to that country. The reason being that the companies that actually made the goods would have to pay higher taxes to those other countries.
