The opportunity to make your business more competitive in your industry, fresh pastures for growth and sales, and an exciting new challenge are all excellent reasons for expansion into global markets.
This naturally comes with certain challenges and considerable risks. While there are multiple factors to analyse before deciding if your business is prepared to go global, we have identified three key areas to focus on;
1. Compliance With Local Employment Laws In The Country You’re Expanding Into
Most companies understand the importance of adhering to local laws and regulations when entering a foreign market, and will not intentionally violate those rules.
However, there may be instances where compliance can become a problem, particularly when learning each country’s separate and potentially complex laws. Before entering a new jurisdiction, the implications of non-compliance should be evaluated to prevent your company from over reaching.
Both home and host country laws can be split into three main sections for general compliance:
- Tax and Social Security Withholding and Payment
- Employment Law
- Immigration and Work Permits
Due to bi-lateral treaties with the home country government, some country’s compliance standards will differ but on the whole specific host country authorities will enforce local laws in each area.
2. Ensuring Your International Employees Are Paid On Time
Global payrolls can be an expensive and time-consuming obstacle for businesses to control. A number of issues can arise when paying employees in multiple locations and many management challenges arise as a consequence. Punctuality with payments is crucial in business for one’s reputation and standards. This is especially important for salaries as employees will have set bills and direct debits allocated to certain dates after their scheduled payday.
Any mistake can have catastrophic consequences for a number of individuals.
Ensuring that you are meeting legal and compliance-related regulations in each country in which you are conducting business is vital as overseas payments for payroll can also cause complications for owners. To analyse outgoings and make accurate predictions for key business decisions, it is advisable to consolidate global payments into one location where possible but this is not straightforward for a global company unless payroll is outsourced.
3. Registering Your Business Correctly In The Country You’re Expanding Into
The names or acronyms of legal structures recognised in different jurisdictions may not be identical but when registering a foreign company, you will need to select a relevant type of business structure and form a legal entity.
This can be achieved in foreign jurisdictions, including offshore zones, and can be done remotely or in person, either as a separate service or in integration with other services such as :
- Low-tax haven or offshore for registration of a foreign business
- Investments
- Tax planning
- Accounting
- Set-up of a bank account
- Office rent
- Citizenship by investment
- Real estate purchase
Summary
For any emerging business, entering a foreign market is a huge shift in operations that could disrupt existing corporate activities. It is crucial for leaders to understand its full impact and determine if the rewards outweigh the risks. Before proceeding. Stakeholders will carry more responsibilities to continue to execute on day-to-day activities in addition to the global initiative because taking a small business global is a complex and dynamic process.