In the current world where the economies are becoming more interconnected more and more businesses want to extend their business to new markets. With increased levels of globalization, many western companies have been trying to expand their businesses in Asia, Europe, and America. With strict regulations in the financial sector, these businesses are required to adapt their financial documentation to correspond to the target market’s needs. They are challenged with a range of legal obligations like tax regulations, risk management strategies, and financial reports that differ from those in their home country. Considering how strictly regulated financial documents are, when preparing your documentation in another language there is no area for any mistakes or errors. This is where the need for financial translation for global businesses shows.
With more companies going global the role of accurately done translations has drastically increased. To make sure all the financial documentation corresponds with the market standards, more and more companies choose to go for financial translation services.
In our previous blog post, we have talked about overall financial translation services and everything you need to know about it. And now we want to talk about the importance of financial translations for international companies.
Why is Financial Translation important for Global Businesses?
Financial translations are an integral part of any global business, no matter how small or big the business is. The reason why companies do financial translations is because international companies are required to present documents such as business plans, future prospects, sales analysis, revenue earnings, management reports, administrative processes, several balance sheets, income statements, etc. in the countries they operate and in the language which the target community can easily understand.
With serious audits, the financial sector is one of the heaviest regulated ones in the whole world. When it comes to financial documentation and financial translation, there is no room for mistakes and errors. And interestingly enough financial translations require the highest level of accuracy and professionalism. If your financial documents are not translated accurately, you can find yourself in a situation with negative legal or financial consequences. Financial translations require nearly the same level of cautiousness as medical translations. That is because even a single missing comma “,” can result in significant losses, particularly during a recession.
Besides that, the companies that go for translation for their businesses tend to improve their profits and earnings. In fact, based on CSA research Fortune 500 companies were reported to be 2.04 times more likely to improve profits and 1.27 times more likely to generate more earnings per share when they invested in translation. So if you want your business to usually venture into the international market to get more clients, translation is what you need.
Hence, to succeed in the global business stage, it is now vital for financial businesses and entrepreneurs to have their financial documentation accurately translated.
Starting Business Abroad
Starting a business abroad has its challenges. If a company aims to start a business abroad they must meet certain regulatory compliances as defined by the country. Depending on the market and country laws, you have to be extra careful with the financial regulations. Whether a business is brand new or has been in operation for years, every company needs to have their finances in order. If they fail to do so they might be charged or even forced to stop operating in the corresponding market. When expanding your business overseas you are most probably required to translate the following documents before giving a start to your business:
- Transfer pricing
- Cross-border finances to minimize the tax burden on interest
- Expat tax issues and returns
- Repatriation of profits
- VAT and Customs Duty issues
To make sure the financial terminology is used correctly and the document is easily understandable, it must be translated by an expert financial translation service provider.
Create Tax Management Strategy
Tax regulations vary in different countries for different business types. Many times those are unavoidable roadblocks that businesses must overcome in order to execute their businesses successfully overseas. It is also important to know that the company’s tax issues in one country may have an impact on what happens in another.
To comply with the regulations of the specific country or area, you need a carefully curated tax management strategy. It will allow your business to boost your capital. It goes without saying how important it is to pay the correct taxes. As the documentation is most probably in a language different from yours to avoid any mistakes, errors and issues you are required to translate it into the corresponding language. It is best to work with financial translators who understand the complexities of financial translation.
Giving your Business an International Image
Taking your company to another country is not enough for becoming international. You also need to start communicating with your target audience in a way that corresponds with them. You need to communicate in the right language that your target customers in the new market understand. This is why having appropriate financial translation is crucial. If you are looking for ways to go international successfully it is best to work with professional financial translation service providers. These professionals not only have in-depth knowledge of the target language but they also understand the laws in the target country. In such a way they ensure that your business is off to the best start in a new market.
Banking, accounting, economics, and insurance are examples of industries that organically adapt to doing business internationally. Holistic communication is critical in these situations, especially when dealing with real estate, taxation, and investment prospects. From submitting improper taxes to not having the proper financial contract written out, any communication problems can be detrimental for all the parties involved.
Financial translation for global business is one of the crucial aspects for today’s business when they aim to take their business to the overseas market. As a top priority, the companies need to find the right financial translation service provider who offers the right skill set and expertise.
Verbika’s translation team is an expert in dealing with financial documentation and working with banking and the insurance industry.
If you are looking to get top-quality financial translation services for your company’s financial statements, annual reports, audit reports, or merger and acquisition (M&A) documentation, just contact us!