Setting up a small business is an exciting challenge in itself, however, for some entrepreneurs the financial opportunities presented by operating a small business overseas are too attractive to ignore.
One reason for operating a small business overseas is that it can provide the entrepreneur or business owner with an untapped market. Many people see an idea that they love but know that their home market is too competitive. By venturing abroad, to a market that hasn’t picked up on the idea yet, there is an opportunity to make greater and faster progress.
It also needs to be remembered that many other countries offer a more favorable business climate for businesses. This may mean a lower level of taxation, tax-breaks for setting up in a certain location, more affordable employment costs and less strict environmental regulations. These are all factors that make an area more attractive than others when setting up a business and it is only natural that a business would set up abroad to benefit from these factors.
Setting up a business overseas
There are many things required before a business can be established overseas. If the product or service is going to be sold in that country, the business needs to obtain the legal right to sell or distribute products. There is also a need to study if there is a market for the product or service in the country. If the products are going to be made in that country and then distributed around the world, there is a need to obtain the right to do so and to ensure that all shipping costs and legal issues are taken care of.
Businesses also need to find the right location, advertise for staff, build relationships with suppliers and understand the legal requirements a firm in their industry faces, while also examining if foreign-owned businesses have different rights.
Financial issues that can affect a business when overseas
Financial issues to think about when considering operating abroad include:
- Fluctuations in the exchange rate
- Tax issues
- Inflation and interest rates between the overseas country and the firm’s base
- Tax regulations and laws
- Incentives on investment
All these factors can impact on the overall success or failure of a firm operating abroad, so it is important that businesses are aware of these issues.
It is essential that entrepreneurs and established businesses take steps to obtain financial help and advice. It makes sense to speak to a financial advisory group with experience of the tax laws and regulations of certain countries. Speaking with a company like Forth Capital helps a firm overcome the initial barriers to setting up a business.
It is also sensible to contact firms that have made the same move. Their experience and connections can save a lot of time and effort in setting up your own business. It may even be these professionals are part of a network or group providing support and guidance for operators setting up overseas.
Developing a contact within the local authority is also a sensible move and the basic advice for any business or entrepreneur setting up overseas is to speak to as many relevant professionals as possible.