An absentee business owner is one who does not personally manage the business but owns it or does not live in the community in which the business operates. Studies show that money spent locally circulates back into the community three times as much when it is not spent with an absentee-owned business.
Local currency
In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area, while a community curren ...
has been implemented in some communities as a countermeasure to this effect. Neighborhood investment, in which members of the community are given opportunities to become partial owners of new developments, is another method.
In
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
, studies found that more than a third of the profits generated from
tourism
Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...
were exported to absentee business owners. In Vietnam, the economic expansion of the 1990s was associated with a rise in absentee business owners. There has also been concern that tourism profits in
Southern Africa
Southern Africa is the southernmost subregion of the African continent, south of the Congo and Tanzania. The physical location is the large part of Africa to the south of the extensive Congo River basin. Southern Africa is home to a number o ...
go to absentee business owners.
Absentee business owners can be more vulnerable to theft by employees, especially when recordkeeping is turned over to employees, unless proper
internal control Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad ...
s and review are implemented. In the United States, many business-owning military
reservist
A reservist is a person who is a member of a military reserve force. They are otherwise civilians, and in peacetime have careers outside the military. Reservists usually go for training on an annual basis to refresh their skills. This person is ...
s have become absentee business owners during long tours of duty in Iraq and Afghanistan.
See also
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Absentee landlord
In economics, an absentee landlord is a person who owns and rents out a profit-earning property, but does not live within the property's local economic region. The term "absentee ownership" was popularised by economist Thorstein Veblen's 1923 book ...
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Landed property
References
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External links
Legacy Planning Services – Lugen Family Office
Business ownership