Heather Landau offers advice and assistance for start-ups looking to expand overseas.
The thought of international expansion can often seem daunting. Unfamiliar markets, cultures, languages and taxation are just some of the concerns – some perceived and some very real – that regularly inhibit start-ups from capitalising on a growing global market.
While these concerns are understandable, international expansion does have its rewards. It can help protect your business from the various fluctuations when relying on one market, it can attract funding, increase revenue and ultimately provide a more attractive investment if your exit strategy is to sell-up.
It’s therefore not surprising that Irish start-ups are considering their overseas strategy right from the very outset. However, there are a number of areas to consider fully that will ensure you make the very best decision for both you and your business.
POTENTIAL LOCATIONS
With 196 countries throughout the world, there’s a lot of choice. Each country has its own unique set of legislation, taxation, government incentives, markets, workforce, visas and permits. The sheer scale of information required can often be overwhelming.
Creating a shortlist of potential locations will help make the process more manageable. To do this it’s important not to consider which countries look the most attractive, but to look at your own business requirements first. Ask yourself: what are the key requirements for your start-up; do you need a physical office; how long will you need to be in the country; do you plan to move overseas permanently; will you be hiring local staff or sending over existing employees; how quickly do you need to be up and running; and what is the competition and demand for your product or service?
Once you’ve defined what’s important for your business, you can determine which country (or countries) best suit your needs. A combination of desk research and speaking with specialists who have the necessary expertise can help you make an initial shortlist of prospective locations.
TESTING THE WATER
If your start-up is designed to sell its products online, a great way to learn about your potential overseas customer base is to start selling your products on websites like eBay and Amazon. Although your margins may be reduced with the commission fees associated with some sites, you can learn a lot about your potential customer base by testing the water online.
While tax considerations should never drive the decision for your choice of location, the various tax and commercial implications of your corporate structure can have a bearing on the overall success of your business.
Selecting the most effective international trading company structure requires careful planning to navigate foreign tax rules that are often complex and frequently subject to change. The various tax considerations will include: local country taxation of ongoing profits; access to tax treaties; and local country incentives.
Heather Landau
Two of the options available to you when setting up your business overseas is whether to set up a branch or a subsidiary.
REWARDING OPPORTUNITIES
Your company structure, local tax, employment requirements, bureaucracy, local infrastructure and competition are just some of the considerations that all need to be carefully researched before making your final decision.
But by taking the time to conduct the necessary research, it can often highlight extremely rewarding opportunities; and you may just find that international expansion is a very real possibility for your start-up.
This post was written by Heather Landau at Open A European Company.com. Heather works with companies across Europe to assist with company formation, incorporation, bookkeeping, virtual offices, accounting and immigration advice.
