A well-known U.S. firm has a reinvoicing center (RC) located in Geneva. The reinvoicing center handles an
Question:
A well-known U.S. firm has a reinvoicing center (RC) located in Geneva. The reinvoicing center handles an annual sales volume of $1.2 billion – $700 million in interaffiliate sales and the rest in third-party sales. The RC buys goods manufactured by the parent company or other subsidiaries and reinvoices the product to other affiliates or third parties. Many of these trades are with “low-volume, highly complex countries.” When buying the goods, the RC takes title to them, but it does not take actual possession of the goods. The RC pays the selling company in its own currency and receives payment from the purchasing company in its own currency. What benefits can such a center provide?
Step by Step Answer:
Foundations Of Multinational Financial Management
ISBN: 9780470128954
6th Edition
Authors: Alan C Shapiro, Atulya Sarin