In business, expanding overseas can be an exciting chance to reach new markets and boost revenue. But there are challenges to consider when doing business in other countries, such as navigating local laws and adapting to cultural differences. To help you overcome these hurdles, here is a guide to key considerations when expanding overseas.
Research the market thoroughly
Doing your market homework is essential before expanding overseas. You’re literally venturing into foreign territory, and you need to be certain that there is the same demand for your product or service. There could be new local competitors to contend with, or demographic differences that require you to market your product differently. The most important thing is to ensure there is a viable market.
Using sources such as Statista and local business reports can help you better understand the market. It may also be worth working with business advisors who understand this new market.
Get help navigating regional laws
One of the biggest challenges of international expansion is often dealing with regional laws. Every country has its own set of rules regarding labor standards, intellectual property rights, and consumer rights. If you ignore these rules, you could face hefty fines or even have your business shut down in that country.
Hire a legal advisor who can map out the compliance requirements. You can then determine what changes you may need to make to your product or service to legally sell it abroad and which licenses, permits, and insurance schemes you may need to apply for. You’ll need to stay up to date on legal changes, including trade agreements like NAFTA and CPTPP.
Understand tax structures in depth
Different countries also tax businesses differently, and you need to wrap your head around this first, too, before you do business abroad. This includes different corporate tax rates, VAT systems, and different tax-deductible expenses. In some countries, you may face much higher taxes than you are used to. In other countries, corporate taxes are very low.
The best way to navigate these taxes is to hire an international tax advisor who can guide you through all of them. You may also be able to work with international accountants who can help file all of this tax for you. Avoiding double taxation may be possible in some cases, but it depends on the tax treaties and relief provisions in place.
Build a strong local team
Need to recruit a team to run operations when expanding overseas? You’ll need to figure out the best way to hire the right talent. You’ll need employees that you can trust, and you’ll need to be able to pay them a decent wage while following local employment laws.
There are specialist recruitment services that you can use to hire talent, such as executive search from Brazil to the USA. You can also try advertising on local job boards. It may be worth hiring someone you already trust to move out there temporarily while you set everything up (hiring an interpreter may also be necessary if there is a language barrier). If you’re simply shipping products overseas, you may not need a team on the ground, though you may still want to look into outsourcing warehousing.
Adapt to cultural differences
There are many cultural differences between countries that can affect how business is conducted and how you promote your product. If you’re traveling abroad to meet clients or investors in person, make sure to look into etiquette: in countries like Japan, punctuality is paramount and formalities like bowing are used, whereas in some countries like Italy, there is a more relaxed approach to meeting times and handshakes are preferred. When it comes to cultural differences in marketing, you may need to consider the different connotations of certain colors, as well as different acceptable customs for portraying people in promotional photos.
Doing your research beforehand will help you prepare yourself for these cultural differences. You may also be able to hire foreign ambassadors to conduct meetings on your behalf, or foreign marketing companies to help you build an effective marketing strategy.
Consider the logistics of shipping when expanding overseas
If you’re shipping products overseas, you’ll need to consider the logistics. How will import/export fees affect your revenue? Will you need to adjust pricing? And what about shipping times? Will you need to look into solutions like drop-shipping so that customers overseas aren’t having to wait days to receive their products?
There are overseas logistics firms that can handle the shipping process for you and advise you on the best way to ship and store goods. Having a logistical plan in place will help to ensure that this aspect all goes smoothly.
Build an international website
While services like Google Translate can allow foreign-language-speaking customers to translate your webpage, you may still want to consider building a separate website for your overseas customers so it can be fully catered to them. For example, if you’re trying to enter the Chinese market, it may be important to create a website optimized for local search engines like Baidu and to use a local payment processor.
It may be possible to hire a local web design company to create a website better suited to your overseas customer base. They will know exactly what your website needs to be user-friendly and SEO-optimized.
Conclusion
While this might sound like a lot of planning, it’s necessary if you want your business to succeed overseas. It will also help you to avoid fines and prepare you for certain fees. There may be some specialist business consultants out there that can advise on everything from tax to logistics, so that you’re not having to seek out advice from lots of different people – they may have teams of experts on different areas or may be able to link up with other third-party consultants to relay the answers to you.
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