Centralization of Treasury Management in Multinational Companies and the Role of Regional Treasury Centres

摘要

Centralization of treasury activities offers companies the ability to achieve higher efficiencies, greater transparency and access to real time information across a broad geographic area, multiple time zones, and many entities. There are different phases in the centralization of treasury management from the decentralized treasury towards fully centralized cash and treasury management. Many firms start with the centralization of foreign exchange and interest rate risk management as the first step towards centralization of treasury activities, and then proceed through cash and liquidity management up to fully centralized treasury. The location of the treasury centre of an international grouping is a very strategic and hence important matter. The decision depends on numerous factors, such as the corporate tax treatment in the hands of the treasury centre itself, the applicable withholding tax rates and corresponding eligibility- to foreign tax credits.