Starting a business in a foreign country may be easier than you think, as long as you keep six things in mind when planning your venture.
Taking advantage of market anomalies in
distant parts of the world used to entail sailing across oceans, battling storms,
and contracting deadly diseases, but these days, starting a business overseas
may be much easier, less risky, and more financially sound than starting a
business in your home country.
In emerging markets, there are numerous Franchise business opportunities
for entrepreneurs and small (or large) business owners with skill sets that
differ from the local population. The six key elements to consider when
starting a business are as follows.
1.
Political Climate
and Property Rights
Some countries around the world have a
history of seizing foreigners' property and/or businesses. You should probably
avoid visiting those countries. Others have impeccable records, solid property
rights, and complete access for foreigners. Finding a jurisdiction with the
least amount of political risk is critical. An index of international property
rights can be very useful in this regard.
2.
Economic
Situation
Countries with low debt-to-GDP ratios,
low or declining unemployment, and strong consumer spending are usually good
bets. Positive indicators include a growing middle class, low inflation, and
rising incomes. It is certainly possible to establish a profitable business in
a country with a stagnant economy, but it may be a difficult task.
3.
Your Personal
Knowledge of the Industry
It is not always necessary to be an
expert in the industry you wish to enter, but keep in mind that bringing in
managerial help will increase your start-up costs. Working with a reliable
local who already has experience and contacts in a particular industry can
significantly increase your chances of success. Finding situations where you
can contribute skills (rather than just start-up capital) is usually
preferable.
4.
Market Research
You should devote significant time,
energy, and capital to analysing local spending habits, as well as how much
time, energy, and capital will be devoted to marketing your products or
services. Before investing large sums of money, set up a trial run or conduct
surveys if possible. Don't overlook how much you'll have to pay employees or
the country's work habits.
5.
Language Barriers
This may not be a problem if your company
caters to other foreigners. However, being able to communicate easily with the
local population will make launching your venture much easier. If you are not
fluent in the language of your target country, try to avoid paying for
translation services except for the most critical procedures (such as revising
contracts and/or the business constitution, if applicable). In most cases,
hiring a translator will significantly increase your costs. Instead, look for a
bilingual individual you can hire on a weekly or monthly basis, someone who can
help with the language when needed but will also be useful for general business
tasks.
6.
The Incorporation
Process
The International Finance Corporation and
the World Bank have created a fantastic page that compares the costs, amount of
time, and number of procedures involved in forming a business in 183 countries
worldwide. The page is intended for businesses with between 10 and 50
employees, but it can be useful for both smaller and larger operations.
Some
examples:
●
In New Zealand, you can start a business in one
day with very little paperwork (two days in Australia).
●
In Panama and Chile, establishing a business requires
six or seven procedures and can be completed in less than two weeks.
●
The process in Portugal can take as little as
five days and involve as few as five procedures, but the country's overall
economic prospects are not promising.
●
Setting up a business in Singapore and Hong Kong
involves three procedures that can be completed in three days. Opportunities
exist, but depending on your type of business, startup costs may be
prohibitively expensive.
Spending tens of thousands of dollars on
a business degree or MBA isn't the only way to prepare for opening and running
a business in another country. While studying business can be beneficial, the
years you spend in the classroom can also be productive, income-generating
years if you choose your market and jurisdiction wisely.
Starting your own business overseas will
undoubtedly necessitate diligence and careful consideration of the six factors
listed above, but with less than $1,000 USD (and even less than $100 USD in
some places), becoming your own boss may not be as difficult as you think.
If you want to start your business
overseas, it can help you with that. So, what are you waiting for? Get in touch with us today!
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