A venture into a foreign market requires considerations about taxes in the country and the double taxation. Taxation relates to the amount of profit that is subject to tax and the rates thereof. In Philippines, the rates of taxes stand at 32% for the corporate and companies. This rate is friendly for the business. The sales or value added tax is at 12% which is also a friendly rate for the business . The double taxation risk is that the corporation will be taxed in host country and Philippines. This may lead to loss of funds and may pose a profit risk to the business.
In a foreign venture, there are supply chain and distribution risks. These risks relate to the availability of material on time for production. The distribution risks relate to the risks that goods may not reach the consumers at the required time. In Philippines, the possibility of having the supply risks is kept at a minimum but since some are of a natural bases, for example floods and earthquakes, their mitigation may pose a risk to the business. However, all other distribution and supply risks are expected to be put on a minimum.
There are various physical and challenges that the corporation will face when entering a new market. Some of the physical risks include infrastructure and location. If the infrastructure in the country is bad, the business will face a risk of lack of commuting. An environmental challenge that the new organization will face include issues on disposal and pollution challenges. These challenges will affect the organization as they will have an impact on the social corporate responsibility policy of the organization. Other environmental challenges include working conditions of workers and external controls of the environment.
References
The Philippines. (2014, November 7). Tax Rates. Retrieved Novemeber 7, 2014, from http://www.rd.go.th/publish/fileadmin/user_upload/AEC/AseanTax-Philippines.pdf: http://www.rd.go.th
