Fred Corso was recently named a partner in Citrin Cooperman & Co. LLP’s Providence office. He is also a member of the leadership team for the firm’s international tax practice.
Corso has more than 25 years of experience working with multinational enterprises, venture capital and private-equity funds, domestic and foreign commercial enterprises, and their respective stakeholders.
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PBN: What challenges has COVID-19 presented the international tax services you offer?
CORSO: The onset of COVD-19 at the beginning of 2020 was a tremendous shock to everyone. Fear, disruption, uncertainty – as we all know well now, there were huge challenges ahead. However, over the course of the year, we have seen industries and individual businesses perform in both unexpected and surprising ways.
While some industries and businesses have struggled and continue to do so, others have performed beyond expectations. Many have even thrived. As a result, there has been incredible demand for our services, as businesses and, critically, technology has evolved in order to address demand and capitalize upon opportunities.
PBN: Part of your work involves private equity and capital markets. Have you been surprised by the relatively strong performance of the market? What advice do you give investors amid continued potential for volatility?
CORSO: We were rather surprised at the resilience of the PE, VC [venture capital] and capital markets at the beginning of the pandemic. Early on, there was a lot of dry powder available for investment and a significant but not complete halt in capital investment and transactions. We saw large transactions close early on in spite of the pandemic and have continued to see significant deal activity.
As we have watched consumer confidence strengthen, seen the arrival of the prospects of several vaccines in the near future and witnessed an unprecedented electoral cycle come to a close, we have been working closely with our clients to understand their specific business needs and expectations in order to help the stakeholders make informed decisions based upon the best available information and well-vetted assumptions.
However, it has become clear that there are some difficult months ahead. Open and regular dialogue with one’s external advisers will likely be as important to businesses as it has ever been.
PBN: Across the world, countries have taken very different approaches to containing the virus and regulating businesses. How has that impacted the international companies you advise in terms of trade, taxes, etc.?
CORSO: Leading up to the pandemic, there were already major pressures on globalization and international commerce due to geopolitical tensions, changes in consumer behaviors and many other variables. Individual nations and blocs of nations were already modifying their approaches and strategies relative to international commerce, taxation of cross-border activities, foreign currency control and other matters that affect businesses in critical ways.
To some extent, the varying approaches to handling the pandemic have functioned to crystalize and accelerate these changes. The limitations and challenges of the existing global supply chain have become all the more clear, resulting in individual countries’ modification of relevant policies, often in the name of national security. These changes, and those that are likely to come in time, have had and will continue to have lasting effects on businesses, causing them to have to adapt in order to survive and succeed in the future. Therefore, much of the discussion that we have with our clients pertains to matters of adaptation, flexibility and efficient access to capital.
PBN: You help clients representing a range of industries, including medical device and life science companies. Have those companies seen profits/demand for services grow during the pandemic? If so, how does that influence the advice and services you offer them?
CORSO: We have seen different industries and specific businesses within those industries be affected and perform in different ways during the course of the year. While some have been deeply harmed, others have found unprecedented opportunity. Suppliers of critical items, services and infrastructure have, in many instances, seemingly been performing very well, even if they are themselves at times constrained by challenges of obtaining needed supplies or qualified personnel.
Big winners seem to be technology-driven businesses and segments that have focused on the enhancement of existing offerings or the development of new digital services or platforms. There has been a seemingly unprecedented demand for such services, noting that there is a much lower barrier to entry for new digital and e-commerce businesses. As a result, there has been significant demand for assistance by businesses engaged in cross-border activities in these areas, both from an inbound and outbound perspective. This trend has the potential to continue indefinitely as businesses continue to redefine themselves and the markets that they serve.
PBN: What long-term impacts do you think the pandemic will have on accounting services and practices?
CORSO: My sense is that the COVID-19 experience has accelerated trends that were already prevalent in the accounting and professional services industry, such as workforce flexibility and remote working, focus on core services offering efficiencies, addition of strategic and complementary service offerings, and competition for top talent.
The public accounting and professional services industry is core to the U.S. business environment and essential to the proper functioning of capital markets. The industry has been intensely focused on maintaining its respected status, remaining relevant and evolving with the times. The pandemic has only increased this focus and expedited change. Access to competent, creative and thoughtful professionals is essential to this end.
Cross-border business and taxation adds yet another layer of complexity. Therefore, I am keenly interested in how matters such as immigration policy evolve in the coming years, as I believe that this will be a critical component to the future of the industry.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
