Dreaming of starting a business overseas? You can make your dream a reality! For many top U.S. firms, going global is not a passing trend. According to CNBC, the U.S. corporate tax rate is the world’s highest (at 35 percent), and that’s why many Fortune 500 companies are offshoring.
Lower tax rates and higher revenues are just a couple reasons to branch out abroad. Even small business ventures can succeed internationally if they learn the steps to take. We’re breaking down five tips you need to know to start your business overseas.
- Pick your destination
When you envision a secondary location or brand new startup, where are you? Who’s there with you? Are you in a warm climate or high elevation? The first step is to pick a destination that you are going to love.
Now, look into the countries that fit your description. The federal government has important resources for doing business safely abroad. Opening or expanding a business is always a risk, which you can minimize by checking out these agencies:
The U.S. State Department’s Overseas Security Advisory Council (OSAC) lists countries that pose safety risks for U.S. travelers abroad. The U.S. Passports and International Travel website offers great tips to read prior to leaving for your destination. Similar to OSAC, this resource provides safety information on your specific destination. They also have information on health insurance abroad and details on health risks to watch out for.
U.S. Embassy Offices around the globe each have different resources for entrepreneurs and small business owners conducting business in that specific country. Click on your country of destination for the particular office’s contact and resources.
The information you find on these pages can help you narrow down which country you choose.
- Check the market
In the article, “7 Traits of Companies on the Fast Track to International Growth,” the Harvard Business Review (HBR) reports that analyzing international and domestic sales and marketing statistics are vital to success overseas. Companies that make the grade are willing to do their due diligence in this area.
Look into your chosen country’s economy. While opportunities may abound in developing countries, you’re more likely to excel in a country that has a stable economy, a growing middle class, relatively low inflation and increasing incomes.
- Get to know the locals
Check out your destination’s online resources. For instance, if you’re setting up shop in a country that speaks your language, check out the British Companies House. Their resources allow you to:
- Find company information
- File your company accounts
- Complete any necessary forms
- Also provide information on starting and running a company
Next, look into the commercial hubs and real estate markets. In “The top 9 cities for business in Britain,” Business Insider reported startup survival rates, employment rates and office prices per sq. ft. The top three contenders were Brighton, Oxford and Cambridge.
Book a trip, network in your venture city and check out the venues for yourself. Talk to local entrepreneurs. They’re more than likely to offer you detailed information and help you find additional resources.
When you open your business, you’ll want to hire a local or an American expatriate who is familiar with area trends and customs, especially spending habits and ways your business might fit into the area based on the value you provide your customers.
HBR said that top-performing companies abroad are “customer-centric,” and they “go the extra mile” to make their customers know they come first. They view these efforts for what they are: opportunities to gain an advantage over the competition, provide greater value to consumers and turn their target customers into brand advocates.
- Know how to operate overseas
During your market research, check into the operations that meet your needs. Will you want to franchise or license your destination? If so, the parent company will be an important resource when setting up overseas.
Is foreign direct investment (FDI) your goal? Offshoring? Foreign subsidiaries? Or are you interested in becoming a multinational corporation (MNC)? Determining the way you’ll operate will impact how you conduct business.
- Create a website
Opening a business abroad can make a website seem redundant. However, it is vital to your success. A website is worth more than the initial startup cost. Websites can provide almost instant magnification for your scope and bottom line. Your ability to serve effectively grows exponentially.
HBR states that companies experiencing success abroad “favor the web” because it makes them “more nimble and capable of responding to opportunity in the market.” Even companies with deep roots and older operating formats grow faster on an international scale if they “invest heavily in online and software-based models for strategic areas of the business.”
Don’t forget, this includes mobile formats. Always check to make sure your website is compatible with mobile operating systems. Don’t forget that it is important to also assess the checkout process on a mobile device, too.
If you are contemplating starting a business overseas, now is the time to get the ball rolling. The opportunities are endless and you will be happy you took the plunge to have your dream company established overseas.