It is safe to say that most people who start a business dream of taking it all the way to the top. You probably have a fair amount of ambition behind you anyway if you have had the initiative to set up your company. After all, the vast majority of people who do so are driven, ‘go-getter’ types who envisage big things for themselves. The interesting thing about running a business is that once you get a little taste of success, you may find that you want to keep pushing yourself to achieve more and more. Once a certain amount of time has passed, you may find that this means breaking into the international market. Why? Well, even if your business is working well at home and turning a good profit, the option for overseas expansion can only mean greater success – providing you know what you’re doing. Or, maybe your business is very much suited to a foreign market, and it was always your intention to move the company over there at some point.
For many companies, overseas expansion is simply a natural progression and tackling the international marketing can be a way to take your business to the next level. That’s not to say, however, that it is a natural process. The whole thing can take months of planning and even longer to fully execute, and there is no room for mistakes. The cost of moving your company abroad isn’t always merely financial – you may also experience an emotional strain or challenge, if you are required to also make a move overseas, thus leaving friends and family behind. But can doing so pay off? Yes, providing your plan the transfer meticulously. Here are all the things you will need to make sure are in order before you relocate or expand your business into the international market.
Tax
Moving your company overseas is popular for many reasons. One such reason is that depending on whereabouts in the world you move to, you could avoid having to pay the usual high amount of tax that is required in your home country. For example, a lot of companies from the UK and US have their headquarters in places like Panama and the British Virgin Islands, where tax is at a much lower rate. There is, of course, the common conception that business owners who move their companies to places such as Panama are doing so to evade tax, and therefore swindle the government out of money. But providing you follow all the correct legal proceedings, there is nothing illegal about registering your company with an offshore account. Even if you do not move to a country where tax rates are low, you will still need to familiarize yourself with the system that applies to that country. Tax and VAT can vary widely from place to place, and it is something you will need to add up in your costings as you plan your move abroad.
Physical headquarters
Registering your company with an offshore account is one thing, but if you do want to break into the international market, a physical headquarters is what you will need. You may still have a business headquarters or office in your home country, and this new one is acting like a ‘branch,’ or a secondary home for your business. Or, you could be scrapping your office in your countries of origin for good and moving everything to a brand-new headquarters, entirely overseas. Whichever one you choose to do, there is a myriad of things to consider. The first thing should be location. It’s somewhat unlikely that you will ever plan on moving your business abroad to a middle-of-nowhere, rural setting. You are probably looking instead at the main cities, where it will be much easier to build your business connections and operate on a day to day basis. Think about what prospects your location can offer you. Is it, for example, situated right in the bustling business district where there are a lot of opportunities for growth? Is it located in a location where people will WANT to work? After all, once you’ve set up your business overseas, you will need to scour the local workforce to find the best staff for the job. If there are no residential spaces nearby at all, you may struggle to find people willing to come and work for you. After all, what employee wants a two or three-hour commute on their hands? Of course, most major cities are serviced by excellent public transport facilities, but always double check this just in case, before you put in any offers. To make your business an even more desirable place for people to work, you could even consider looking at the HDB for commercial property that is nearby to current residential settings. Remember that in huge business districts, the quality of the commercial property is high, so the workforce you are hiring will be used to attractive and functional offices. You will need to be willing to spend a bit of time and money creating a stylish and engaging place for your employees to work, so it is aligned with the kind of working conditions they are accustomed to.
Market research
Going in blind to an overseas business move is risky. You may think that the Chinese or European market is ideally suited to your business – but how exactly do you know that? Just because you have seen other similar businesses make the same move doesn’t always mean that yours is also guaranteed success. Plus, if there are already a lot of foreign companies doing what you do in your company of choice, you may find that the market out there is simply too competitive. Do plenty of research on the countries you have in mind and ask yourself why it is you have a desire to move the business there. What is their economy like and is it stable? Sure, individual countries appear to be thriving and have been doing so for many years, but for all you know a massive market crash could be right around the corner. This is the absolute last thing you want when you’ve just spent hundreds of thousands moving your business overseas – so, if economics are not your strong point as such, enlist the help of a trusted financial advisor. The world banks and markets are complicated things to understand and speaking to a professional can help you decide where you can most confidently make a move to. It’s not just a country’s finances that you have to research, either. You also need to bear in mind whether a business like yours fits in with their current climate. For example, a company that focuses heavily on renewable energy is not going to prosper that much in a country that barely uses it. Spend some time studying the culture and how people there operate, before you make the final move.
Logistics and integration
Uprooting your life to move abroad is one thing, but doing the same with your business can often be even more of a challenge. You will need to get everything sorted far in advance – so that means selling your current business premises, and organizing staff redundancies. Of course, if you are still keeping your ‘flagship’ headquarters at home this won’t necessarily apply to you, and the staff you have, there will probably be able to keep their jobs. But if you want to move overseas entirely and dissolve the business as you knew it at home, you will need to be prepared to make a few redundancies. This is never easy, especially if you get on well with your colleagues and have done for a while. But if they are not willing to make a move with you, you will have to let them go, and potentially help them find new work too. If you do have individual staff that wants to come with you under their contract’s mobility clause, it will be your responsibility as the business owner to help them organize this move and maybe to even arrange accommodation for them; at least initially. Another thing you will need to consider about the move is how smoothly you and your business are going to integrate into a new culture. If you are, for example, moving from West to East, it is worth bearing in mind that business matters are often dealt with very differently over there. There are plenty of customs in place, and to avoid looking a fool or making a social faux pas in front of anyone, it can be worth learning a bit more about the culture before you start trading. International business can be an amazing arena to get into, but it is not without its risks. However, if you prepare enough and know what you are doing, you may find that it is the best thing you ever did for your business.
