Chapter 5 Chapter 5

Managing Currency & FinancesManaging Currency & Finances

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Budget ConsiderationsBudget Considerations

Higher air travel, shipping & communication costsHigher air travel, shipping & communication costs More & longer site visitsMore & longer site visits Customs/duty/taxesCustoms/duty/taxes Interpretation/translation costsInterpretation/translation costs Changes in local politics & economyChanges in local politics & economy Contingency/emergency fundsContingency/emergency funds Currency issuesCurrency issues

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Getting AdviceGetting Advice

International banks & currency brokersInternational banks & currency brokers International accounting firms & stock brokersInternational accounting firms & stock brokers Planners with multinational corporationsPlanners with multinational corporations International currency & foreign exchange International currency & foreign exchange

specialistsspecialists

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Currency StrategiesCurrency Strategies

Know what questions to askKnow what questions to ask Capital preservationCapital preservation

– Options contractOptions contract

– Forward contractForward contract

– LayeringLayering

– Spot priceSpot price

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Planning GuidelinesPlanning Guidelines

Contract & registration currencyContract & registration currency Paying for day-to-day expensesPaying for day-to-day expenses

– Cash in local currencyCash in local currency– Letter of credit, bank draft or travelers checksLetter of credit, bank draft or travelers checks– High limit credit cardsHigh limit credit cards– Local checking accountLocal checking account– Cash from hotel master accountCash from hotel master account– Local fiduciaryLocal fiduciary

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Tax IssuesTax Issues

US & Canadian tax codesUS & Canadian tax codes VAT, GST or IVAVAT, GST or IVA

– What is level of tax? (5-25%)What is level of tax? (5-25%)– Should be included on all bidsShould be included on all bids– Are any items exempt?Are any items exempt?– Reclamation requirements for organization Reclamation requirements for organization

and individualsand individuals

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved