Most businesses strive for growth. This growth means different things to different organizations. However, some include taking the next step to global distribution. There are a few opportunities available for businesses looking to start a business abroad or expand to a new overseas market. Firstly, there is the option to export your products or services to foreign countries but keep your base in your local domain. Secondly, you can choose to set up a business in the new territory. Below we take a look at taking the step into starting a company abroad and the benefits it has for business owners.
1. Lower operational costs
Costs are a significant factor when running a business. Although moving operations may seem like a daunting prospect, it can have benefits to the bottom line. Depending on the country you choose to operate or manufacture, you may have access to lower labor costs and general operation charges, such as running a premises. In some cases, it can be a controversial move. Still, there are benefits to the locals in jobs and money going back into the economy.
2. A large pool of talent
There are a number of locations across the world where you can gain access to largely untapped pools of skilled workers. In places such as Asia, there are highly skilled workers available that welcome new and innovative ideas to take their skills to the next level. There are also firms in the native country that can help with resourcing. As an example, if you were considering recruitment in China to start your business, then you could consider outsourcing the task of recruitment to INS Global, as they will have local knowledge and expertise.
3. Business-friendly laws and regulations
There are countries around the world that strive to be the top places to do business. According to Business Insider, New Zealand and Singapore are some of the best places as highlighted on the ‘Ease of Doing Business’ list. When you are looking to start your business abroad, there are a few considerations to make, including:
- Ways of obtaining credit
- Ease of getting permits
- Taxation rates
- Laws and regulations
Countries that are favorable in these areas make the process easier for anyone looking to start a business in the country. They have low levels of bureaucracy and encourage innovation to help their economy succeed in the foreign market.
4. Untapped market opportunity
Another benefit of starting a business abroad looks at the possibilities of tapping into less saturated markets. Your current industry may be extremely competitive on home soil. However, if you look at the same markets in different countries, you may find a virtually untapped opening. These opportunities mean you could potentially open yourself to a ‘big fish in a small pond’ scenario until other companies catch on. There may also be lower operating costs in these countries, so the margin of profit may increase too.
5. Government incentives and low taxes
In many countries, there is often a range of government incentives to encourage start-ups. This may be in the form of investment opportunities to make business incorporation more attractive. There are also a variety of tax incentives that appeal to business owners. An example includes the US company Burger King who moved their headquarters to Canada to save millions in the process. By making it more attractive, both big and small companies can enjoy the benefits of government offers.
It can also be helpful to take a look at the levels of corporation tax in different countries. The UK has a rate of 20% compared to the US, which is 35% in the highest bracket. Tax savings are some of the most appealing aspects of starting a company abroad. They can also help a company save thousands, if not millions depending on the size.
6. Simple business registration
In some countries, there are straightforward registration processes to get you off the ground. Locations such as Malaysia only require a few documents and a few days to get started, which can help if you want to act fast.
7. Vast opportunities
If you are looking to tap into a larger market, developed countries are a source of opportunity. Many countries in the EU are an ideal place to set up due to the long-standing relationship created by the European Union agreements. If you are established in one of these countries, you can access the free movement of goods and services within other EU countries. This makes transporting and selling products cheaper. There is also fantastic infrastructure, and the EU also has excellent ties with the rest of the world to make selling outside of the EU simpler.
8. Abundant business services
Each country has a niche, and in many, this includes an abundance of reputable business services and finance options. Locations such as the US, Europe, and the UK are renowned for having some of the most developed financial services and investment opportunities in the world. In contrast, countries such as China and India have some of the largest manufacturing businesses across the globe to tap into. Each place has its strengths, and companies entering a new market can decide on the top priority business services to take advantage of.
9. Consider emerging markets
In some cases, some markets are not fully developed but have significant potential. You may find that a lack of funding or investment hampers these efforts, but it could present an opportunity to take a risk for your company. If you have the resources, tapping into emerging markets can be extremely profitable. Still, of course, it does not come without challenges. These might present finance restrictions, resource availability, and infrastructure problems. However, if you can spot a way to work around these aspects, you may reap the rewards and boost the local economy in the process.
Starting a business in a different country can be challenging. There are many things to consider, and extensive research is highly advised. The benefits often outweigh the potential pitfalls, and it can open up a host of new opportunities to take your company to the next level.