Colombia always had the potential to become a major mining jurisdiction but the mining sector is now completely frozen. There is a high level of uncertainty due to the governments push to reform the mining code, create a state mining company, and new a environmental decree.
Transfer pricing poses a significant risk to companies who are operating internationally since many countries are looking at these arrangements to ensure that profits are not being shifted to lower tax jurisdictions unfairly. It is important that companies understand how transfer pricing works in every country they are operating in.
Foreign companies operating in international markets need to be aware of how to manage the risk of corruption within their subsidiaries. This is particularly true in Latin America where operations can be far from the head office meaning local staff are often working with limited oversight.
Companies often overlook the importance of the dismissal letter. An improperly drafted dismissal letter will lack the legal grounds to ensure the cause of dismissal would be upheld if the matter were to go labor courts.
It is not always exciting to think about but how we grant powers and structure companies from a corporate governance perspective but it plays an important role in how we protect the foreign shareholder and ensure the local entity is operating to the highest standard.
Mining suppliers may use a local subcontractor for their installations at a mine site or to provide specialty services that are part of a larger contract but outside the suppliers’ core capabilities. The issue is that foreign companies can find themselves in trouble if they do not understand the risks that are particular to Chile and how to manage them when using subcontractors.
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