How to do business in times of economic uncertainty
Optimising cost and maximising profit has never gone hand in hand better than the current situation we are into. The COVID-19 has brought the global economy to its knees. The OECD projects a 2.4% fall in world growth in 2020. Since no one knows when the pandemic will cease or when the cure will be effective, the uncertainty has led to the consensus that the world is heading towards a recession.
If the COVID-19 currently affects your operations, this article provides solutions that may help you stay afloat. Here is how you can optimise the cost of your business during these times of economic uncertainty.
The uncertainty affects companies around the world
With more than 200 countries affected, the COVID-19’s outbreak has had profound negative business repercussions:
- Supply-chains, daily operations, systems, the workplace disruptions;
- Flow of goods and people has been severed on a global scale;
- Slump in customer’s and investors spending has impacted financial and commodity markets;
- Investment in real estate properties, bonds and shares has become unstable and uncertain;
- Global unemployment rate is on the rise: many businesses are lacking the necessary capital to remunerate their employees, while others are forced to terminate the contract of their workers. In the United States for instance, 17 million people (10% of the workforce) filed for unemployment in during the past 3 weeks; and
- Key macroeconomic indicators like oil and interest rates are on the decline amongst others.
While some foreign and domestic SMEs and multinational companies are closing down, many have found a way to adapt and not perish.
How can companies optimise their cost during these times of economic uncertainty?
Many businesses around the world have adapted to this major crisis and work-from-home has become the norm. We can also see that, in certain cases, the COVID-19 was a propeller for new growth in some segments while stimulating latent potential in others.
Indeed, the current situation has accelerated the digitalisation in some industries. Others were forced to adopt a digital approach to doing business. Productivity has taken a new dimension and many businesses and institutions are carrying out their operations online, most notably with a shift towards the booming of e-commerce: courses, services, fitness classes, concerts, media groups (newspapers and magazines), and most notably supermarkets and shops.
As a result, we are witnessing an increased use of digital payment methods with the growing importance of contactless exchanges and transactions, requiring the services of payment intermediaries. With the digitisation of assets and transactions, it is interesting for payment services providers to establish themselves in an attractive Fintech hub. Being the first jurisdiction in the world to issue Custodian Services Licence for Digital Assets, Mauritius provides a business-friendly and well regulated environment for Fintech activities.
Another good example could be the pharmaceutical industry, where companies are exploring the venture of self-diagnosing medical devices, personal protective equipment, digital medical assistants, telemedicine and online consultations. To make these innovative products and services available to their target market effectively and efficiently, it is important for them to have the right corporate structure.
With the altered business activities, many companies are finding it difficult to sustain their operations, especially in their home country. While some see the closing down of the company, it would be interesting for them to consider a re-domiciliation in the first place. Indeed, re-domiciling to a stable and well-regulated jurisdiction is likely to be a good choice.
For companies who are involved in the services sector (providing international trade, management and consultancy, IT or marketing services for instance) whose business activities and Place of Effective Management are outside of Mauritius, they can also optimise their costs by setting up an Authorised Company. It is an ideal structure for the administration of international operations.
How Sunibel can help you during these challenging times
From the Mauritius International Financial Centre, we help you face the economic downturn COVID-19 has brought. We provide tailored advisory, corporate and business services, and are here to help you find solutions that will enable you to optimise your costs and maximise the value of your company.
Through our “consultant” approach, we guide you in your decision-making process and manage your business with dedicated and professional attention, allowing you to focus on your core activities and achieving your objectives. We accompany you in:
- Structuring and setting up or re-domiciliation of your company
- Assist with the application of the licence or the e-commerce certificate with the FSC
- Opening of bank accounts in nominated currencies
- Opening of necessary merchant account facility with selected bank(s)
- Provision of directors and company secretary
- Accounting and bookkeeping (including tax filings)
- Corporate administration and other services
- Provision of registered office address, sourcing of staff and payroll
- Assistance with Occupation Permits and relocation
The list of services above is non-exhaustive.
Contact us to know how we can help you do business during these challenging times where recession is looming.
Click on links below for more information about Mauritius:
- Mauritius Financial Centre in figures
- Live and work in Mauritius
- The Mauritius business hub
- Mauritius as an International Financial Centre
- Mauritius, an ideal jurisdiction for Global Business
- The diversified economy of Mauritius