ABSTRACT
This chapter covers how a company finances its international trade and foreign direct investment. It discusses the key accounting and taxation issues in international business. Like human resources, financial resources are critical to international business success. A company needs to acquire, allocate, measure, record, and manage its financial resources. To support international trade, a variety of financing tools have been developed over the years. Some are designed to facilitate payment and collection, while others are used to acquire financial resources for exporting or importing. Due to money flow restrictions in some countries, loan payments are usually easier to be remitted than dividends. After acquiring financial resources, multinational corporations (MNCs) need to decide how to use the money that is how to allocate money among promising projects around the world. To avoid double taxation on international money transfer, some countries, like China and Iceland, have eliminated tax on foreign source income.
