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Alexander Hamilton Awards

Custom-Built Software Streamlines Currency-Controls Compliance

Congratulations to Microsoft, winner of the 2019 Gold Alexander Hamilton Award in Working Capital & Payments!

As most markets around the world become increasingly accessible to foreign companies and investors, some remain stubbornly closed. Of particular concern to corporate treasury teams, currency controls in certain locales continue to create barriers to launching or growing foreign subsidiaries. A couple of years ago, Microsoft treasury faced this situation in Brazil.

The company’s Brazilian sub was growing fast. “It’s a market with a lot of potential,” says Sunnie Ho, a senior treasury manager in Microsoft’s Global Cash Management group. “But Microsoft Brazil has an increasing number of transactions with organizations based outside of Brazil.” These transactions were placing a drag on the productivity of local finance staff, and the issue was growing along with the business.

To make an offshore payment, Microsoft Brazil had to provide its bank with invoices and other documentation to prove that the transaction was for one or more legitimate payables. The bank would review the paperwork it received from Microsoft; then, once it approved the transaction, the bank would withhold the appropriate amount of tax based on the type of products or services being paid for, conduct a foreign exchange (FX) transaction from Brazilian real (BRL) to the other currency, and settle the transaction.

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Meg Waters

Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.

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