Subject: Invoice Finance Options for UK Head Office and EU Subsidiary
Hello Community!
I’m curious if anyone has experience with invoice financing arrangements involving a UK head office and its subsidiary in the EU. Most of the examples I’ve come across typically involve unrelated companies. Any insights or experiences would be greatly appreciated!
1 Comment
bdadmin
Yes, it is possible to set up an invoice finance arrangement between a UK head office and its EU subsidiary, but there are a few considerations to keep in mind:
Regulatory Compliance: Both the UK and EU have specific regulations regarding financial transactions and the transfer of funds. It’s important to ensure compliance with both jurisdictions, especially post-Brexit.
Due Diligence: Lenders will likely want to conduct thorough due diligence on the subsidiary, including its financial health and creditworthiness. They will assess the risk involved since invoice finance is essentially a way to provide liquidity based on the invoices owed to the company.
Invoice Verification: The lender may require verification of the invoices and the underlying contracts to ensure they are valid and enforceable. This could involve checking the terms of trade between the head office and the subsidiary.
Cross-Border Considerations: Be aware of any cross-border financial implications, such as foreign exchange risks and potential tax implications, depending on the structure of the arrangement.
Lender Options: Look for lenders who specialize in cross-border invoice finance or those familiar with UK-EU transactions, as they will have the expertise to navigate the complexities involved.
Having a well-defined agreement and working with experienced financial advisors or brokers can greatly facilitate the process. If you have more specific questions or scenarios in mind, feel free to share!