What successful business owner doesn’t dream of taking over the world, one country at a time?
Sadly, turning this dream into a reality isn’t a straightforward process. Different markets could mean an entirely different customer base; what works well in your home country may not have the same appeal in international target markets. Then there’s also the competition to think about. Do you want to be a big fish in a small pond or a small fish in a big pond?
Expanding overseas is a daunting step for any business owner. And it’s essential to figure out whether doing so will be worthwhile for your organisation. But if you have the right infrastructure in place and the funds you need to make the move (as well as a lucrative customer base to tap into), then global expansion could be on the horizon.
Before you go in with all guns blazing though, it’s crucial to consider the practicalities of operating in a new country. Here are five things to know before taking the leap into overseas markets…
1. Setting up a bank account isn’t always so simple
To pay tax and social security contributions, you’ll typically need your own business bank account in the country you plan to operate and employ staff in.
But even in this digital day and age, setting this up is, unfortunately, not always as simple as you might think. In many countries, you must be present in person to open a bank account, and the process could take many months. So, allow plenty of time and money for your flight.
2. Not everyone will speak your language
Communication is key in business, so it’s important to be able to converse with local employees, associates and customers. Don’t just assume everyone will be able to speak your language!
Local customs and what is expected of employers or employees can also vary hugely from country to country. For example, Scandinavian countries such as Sweden take a much more relaxed approach to work, with a big focus on work-life balance. In comparison, it’s not uncommon for employees to work nine to 10 hours during the weekdays and half a day on Saturdays in countries like Singapore.
Having someone on the ground who speaks the language and understands the local customs will be vital when you’re expanding into new territories.
3. Countries don’t all play by the same rules
Everyone’s rules are different, even in neighbouring countries. You’d be forgiven for thinking that employment or tax rules will be more or less the same if two countries are right next to each other. But that isn’t always the case.
The way reimbursements are treated also varies from country to country. Some expenses could be deemed taxable benefits, for example. Different countries will also have varying rules around severance. In some, you may be able to part company with your employee with no notice whatsoever — whereas it may be legally impossible to stop employing them in others.
These laws affect everything from hiring employees to filing your tax returns correctly. So, you need to make sure you have country-specific expertise to keep you on the right track throughout your global expansion journey.
4. Data protection is a never-ending challenge
Since the General Data Protection Regulations (GDPR) came into force in 2018, data security has been a hot topic for many organisations. But getting to grips with international data protection laws can be a time-consuming and often relentless task. Just when you think you’ve scored the perfect solution to your data handling processes, the goalposts move. The recent fall of the Privacy Shield agreement between the EU and the US is just one example of how quickly things can change.
However, the fines and repercussions for non-compliance could potentially cripple your business. So, it’s vital to be aware of which data protection laws apply to your company in any given country before setting up operations there.
5. Things won’t always go to plan!
Don’t underestimate the complexities of cross-border employment and operations. When you’re trying to expand into another country, things WILL go wrong. With so many different pieces of the puzzle to fit together, this is inevitable. And that’s okay!
Accept it; prepare for it. Whether that be by stashing away some reserve funds for unexpected costs or coming up with a plan A, B and C for any given scenario.
The right partner and local experts on the ground can make all the difference to your global expansion journey. Get in touch with TopSource Worldwide today to find out more about our international employment services.