With its headquarters in the global hub of Miami, Berkowitz Pollack Brant is in the perfect spot to attract, attain and assist foreign and domestic clients who are ready to conduct business on an international level.
"By nature, the type of clients that we deal with, the firm has blossomed to be a global practice," said Barry Brant, the firm's director of tax, consulting and international services.
Most of BPB's international tax team are multilingual, said associate director of tax services Anthony Gutierrez, who is fluent in Spanish and English. "We have people who speak Portuguese, French, Russian, Italian and Japanese." The firm also deals with clients who speak Hebrew, Arabic, Mandarin and Chinese. "There are a lot of complex tax rules that we have to educate our clients about and it's really helpful to speak to them in their language because it puts them at ease and we gain their trust," said Gutierrez.
But knowing different languages isn't enough to get the job done. BPB's international team has familiarized themselves with most, if not all, of the cultures, tax laws and political issues of the countries it conducts business in. Members of the international tax team recently went to Sweden to work on a deal and they were able to hold a conversation about the recent changes of the tax laws in Sweden, which Brant said was very beneficial to their clients. "They were surprised that we knew about the tax laws in their own country, but we also knew what was going on with the political environment and the immigration problems that they were having."
When it comes to learning the laws of the countries it visits, BPB gets help from its international affiliations, PrimeGlobal and PKF International, which provide resource guidebooks that give summaries for the countries they cover. "When we are not sure of something, we have the ability to go to our affiliates and ask for their input and advice on the way the laws work in their countries," said Brant, adding that the firm also has relationships with "top law firms in those countries."
On the move
The firm's international tax practice operates under two major categories -- inbound and outbound. The inbound segment advises clients on how to bring their foreign business, or themselves, into the U.S. in a tax-efficient, business-friendly way, explained Brant.
"When you are dealing with individuals, it's extremely important that they get planning even before they start the immigration process." The process for individual clients is also referred to as "pre-immigration planning," he noted, adding that the firm can save clients millions, if not billions of dollars, with the right structure. The firm sees to it that the structure is tax-efficient and flexible, that it works for the client's immigration purposes, and that it enables them to grow while minimizing their exposure to U.S. income tax and estate taxes. "Sometimes it's as simple as buying a piece of real estate in the U.S. And if that's not done the right way, there is a tax that will be due to the IRS unnecessarily by both foreign individuals and business."
The firm's outbound category provides services to individuals who are investing in foreign countries, but most important, businesses that are expanding or taking steps to operate outside of the U.S. There are a complex set of rules for U.S. taxpayers who are operating or investing in foreign countries, probably the most complex in the entire Internal Revenue Code, warned Brant: "If you plan right, you can create tremendous referral opportunities for clients. And if you don't plan them right, you can cost clients a lot of unnecessary income taxes."
Where the clients are
Given its position, Miami is considered to be the general hub for Latin America and the United States, but many of the firm's clients originate out of Europe. Brant estimates that about half of the firm's international tax individual clients are from Europe, (including Russia and Eastern Europe), while 40 percent of its individual clients are from Latin America. "Miami is a melting pot. It is a very attractive place for Latin Americans and Europeans." Brant explained that the firm is probably strong in Europe because of its reputation with law firms, banks and other professionals practicing in Europe.
On the flip side, Latin America provides 70 percent of the business and corporate clients in its international tax practice, while Europe accounts for about 20 percent. Brant said that Asia accounts for 10 percent of both individual and business clients. "Miami is not necessarily the most popular place for Asians coming into this area, but because of our reputation and expertise, we do get asked to consult to a number of companies going outbound to Asia or coming in from Asia."
BPB usually works with high-net-worth individuals and foreign trusts, which Brant said can be "extremely complicated." Trusts are usually connected to individuals and structured for families that have created wealth outside of the U.S. and may have beneficiaries who have settled in or are now citizens in the U.S.
The firm also works with private and public corporations that are preparing to expand into and out of the U.S. "Sometimes there are startups here in the U.S. but they are very well-established in Europe or Latin America. In other times they are already in the U.S. but they need additional tax planning, structuring or new lines of business for expansion," said Brant. "Likewise, going out of the U.S., you'll have U.S.-owned businesses that need advice on how to set up their own businesses in foreign countries."
Most of the businesses that are making international moves are manufacturing companies setting up shop in countries with cheap labor, or low tax rates, or have incentives to set up operations where there is a tax abatement period for 10 or 20 years or longer.
Associate director Alex Molieri added that back-office type services are also on the move. "U.S.-based publicly traded companies are taking functions like accounting and marketing to countries like Mexico, Costa Rica and a lot of Latin American jurisdictions where they are able to operate in tax-free and free trade zones where labor and tax cost is cheaper."
Taking care of business
Brant said that his team makes it a point to pay close attention to their clients' domestic and international tax needs.
"Sometimes you go to a large firm and they realize that the client is interested in international service and they are then turned over to the international tax partner or international tax department. And those people aren't really experts in domestic tax issues," said Brant. All of BPB's international tax experts are also experts in domestic tax. They are able to understand the implications of a transaction that has an international effect that will more than likely have a domestic effect. The firm also looks out for long-term obstacles that may arise and they advise their clients on what the consequences and various alternatives could be down the road.
Brant suggests that those who don't practice international tax believe that there are a lot of off-the-shelf structures. However, clients at BPB won't get the "off-the-shelf" treatment. "All of our solutions are custom-made based on the client's individual needs."
Keys to success
Gutierrez said there are a lot of advantages to having an international tax practice, but firms wanting to break into the global tax arena should also be ready to dedicate resources in building an international team.
The way BPB builds its team starts at the recruitment process. "Sometimes it's very helpful to have an attorney that has the background in accounting," said Molieri. Once newcomers join the international tax practice, they attend international compliance and consulting seminars, which Molieri conducts on a weekly basis for all of the members in the firm's international team. "You really have to understand the different training strategies that are allowed. The way the regulations read isn't something a person can pick up from one day to the next."
Other building blocks include staying abreast of new rules and tax laws, which are continuously changing. Outside training, developing a leader, and resources are also necessary to a successful international tax practice. "You need technology, you need research services and you need to continually train your team," said Gutierrez, noting that BPB uses CheckPoint HR and BNA for its research tools.
Molieri noted that networking events and getting involved in the community are beneficial for those thinking about getting into international tax: "[Attend] speaking engagements so you can talk to foreign bankers about pre-immigration."
Brant advises that firms should take their time if they are trying to break into providing international tax services. "It's a hard thing to start from scratch. I would start small and make sure you have an international tax attorney or international tax accounting firm, like ours, as a resource to check in with on issues that are new or too complex."
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