NATURAL WOOD FURNITURE PLC

Investment of Natural Wood Furniture Plc in Germany and India

Executive Summary

Globalization has totally transformed the human life and organizational performances. The world has now become more than every enriching and challenging place to work with different cultures, nations and systems. Organizations that are already operating outside their home country are not limited to a few huge enterprises anymore. The world has watched the proliferation of multinational companies from many countries and later from the developing economies. For this purpose, it has become necessary for almost all companies to operate in their own locality first, and when they have enough control over their area of origin, then they must go national and then international. This is the need of the time and the demand of customers, otherwise in this highly competitive environment it becomes almost impossible to survive. In this paper, we have discussed the summary of the legal forms, summary of potential finance for the proposal, tax and tax planning, exchange rate issues, economic analysis, country/political risk analysis, and financial reporting in Germany and India.

Table of Contents

Executive Summaryii

Objectives of the Proposal1

Summary of the Legal Forms2

Summary of Potential Finance for the Proposal3

Tax and Tax Planning4

Germany4

India5

Exchange Rate Issues6

Economic Analysis6

Germany6

India7

Country/Political Risk Analysis9

Germany9

India10

Financial Reporting11

Conclusion and Recommendations11

References13

Objectives of the Proposal

The proposal is aimed at analyzing the two countries that are Germany and India in which we want to expand the business of wood furniture. It will help us to understand the various features of the two countries, where the business is intended to expand. The company's management should understand the various aspects of these countries including the economic, political, legal and other considerations that are important to understand for investing in the country with appropriate measures for managing the risk.

The business of wood furniture in Germany is flourishing and there will be many competitors for the company; therefore, it is essential for the company to understand the various aspects of the industry. In international competition, Germany as a place of investment capital has a number of advantages - high efficiency, good level of vocational training the workforce, a high degree of motivation to work among workers, a high level of technology, creative scientists well-functioning infrastructure, social peace, secure currency and a stable political environment. However, these factors are not enough to compete in the future. On the world market German companies is difficult to compete with rivals on parameters such as unit labour costs and related indirect costs, working hours and corporate taxation, environmental regulations and social contributions. These costs must be neutralized due to the growth of labour productivity to remain competitive in research and development, development of key technologies and implementation of innovations into viable products. Similarly, there is a wide market of wood furniture in India; however, the management of the company may get cheap and affordable labour over there, resulting in economic profitability of the company in India.

Summary of the Legal Forms

In Germany, the company has an option of local German subsidiary company, where it ...