A guide to doing business abroad

Explore the benefits, challenges and best practice approaches to international expansion

The Internet has created countless opportunities for businesses to reach new customers and expand their horizons. In this guide, we’ll outline just some of the key risks and rewards to going global, so you can get your overseas expansion plans underway.

1 Overview

Here's our detailed guide to explore the specifics of doing business abroad:

2 Doing business abroad

Expanding abroad can be a great way to grow your business and explore new opportunities. It’s also been proven to improve productivity and output – and wages and levels of investment also tend to be higher among exporters.

Organizations doing business abroad also tend to adopt best practices quicker than their counterparts. Likewise, expansion can expose a company to new ideas, management techniques and marketing strategies that they would otherwise have missed out on by staying put.

3 What are the benefits of doing business in other countries?

Key reasons1 you may want to consider doing business overseas:

  1. Expand customer base: You will be able to expand your markets and tap into valuable sources of new customers.

  2. Prolonged sales cycle: Doing business in global markets may also help you prolong the sales cycle of your existing products. For example, products with flatlining or falling sales back home could be the next big thing in your new overseas markets. In addition to that, your business could be better positioned to ride out seasonal sales fluctuations. For example, your Jan-March winter bestsellers in the northern hemisphere can be re-marketed to southern hemisphere audiences as their temperatures drop during Jun-Aug.

  3. Ongoing growth options: Entering new markets abroad will also help reduce reliance on your own local market. So, if your domestic market experiences an economic downturn, your foreign markets could be a source of ongoing growth – and vice versa.

  4. Discover new business practices: Another advantage of doing business overseas is that you will discover new methods and practices of working. These could potentially make you more competitive and help you grow as a brand.

4 Disadvantages of doing business internationally

Disadvantages of doing business internationally

Despite the many advantages, there are nevertheless some challenges1 of doing business globally.

Here are just a few to consider:

  1. Language and cultural issues: The language barrier is perhaps the most obvious, and it may be worth your while hiring bilingual staff abroad who can translate for you – especially when it comes to areas like customer service. Likewise with cultural variations. Hiring local staff will help you understand how that country’s perspectives or tastes will influence demand for your product or service, or how it should be adapted. Using appropriate localization strategies as part of your overall expansion plan is a good way to deal with these kinds of challenges.

  2. Global compliance and regulations:
    Another potential disadvantage of doing business overseas can arise from having to learn lots of different tax codes, business regulations, and laws around packaging. In fact, you should allow several months to complete the necessary paperwork for achieving compliance or even just ensuring your business is set up correctly in your new market. You may also find dealing with foreign banks quite challenging, especially if they’re reluctant to engage with the administrative burden of a non-domestic company.

  3. Packaging regulations: It’s not just your product that needs to be localised – you’ll also need to ensure its packaging and presentation adheres to local laws. This will vary from country to country, so having local staff ready to advise will be a big help. In Europe, for example, instructions for even the simplest products may need publishing in up to 24 different languages.

  4. The pace of doing business: One of the biggest challenges of doing business globally is accepting the fact that things can take longer to resolve than you’d like – especially if you’re used to a fast-paced way of working. Try to be patient and invest the time and energy to build trust among your new network of colleagues and suppliers.

  5. Building customer trust: When it comes to international business opportunities and challenges, you may well find that persuading foreign customers to trust your brand is harder than you think – especially if similar alternatives are already available in their home country.

5 Doing business abroad checklist

Ready to get your overseas expansion underway? Don’t go anywhere until you’ve read our top tips 1 for international business.

  1. Find the right team: Setting up a local office and hiring a team who know the market, language, and local laws will make a huge difference.

  2. Put the right infrastructure in place: That includes the ‘basics’ like IT and telephone systems, but you should also ensure employees can share data securely, and that you’re abiding to customer data storage laws and guidelines.

  3. Expand your perspective: You’ll need to get used to weighing up new ideas from the viewpoint of your new country’s customers – rather than the usual audiences back home. If you don’t, you run the risk of appearing more focused on your own interests, instead of others.

  4. Do your homework: Be sure to dive into all the details and explore every potential scenario. Know your competitors too, and get familiar with prices, routes to market, and any similar products that are out there.

  5. Make use of expertise: Accept the fact that as your business grows, you can’t do everything yourself. Learn to rely on trusted experts to help you make the right decisions and keep you on-track.

  6. Stay flexible: Every road to expansion has its bumps along the way. Accepting they will happen and being ready to overcome them or take a different approach is vital for your success.

  7. Adapt your customer service: Last but by no means least in our doing business abroad tips is...customer service. Because no matter how well you’re supporting customers right now, your new overseas customers will require you to make significant changes to your operation – not least in having to allow for different time zones, etc.

6 Best country to start a business as a foreigner

Knowing precisely which country is best for business can be tricky...especially as there are so many to choose from.

A good place to begin creating a list of countries easy to do business with is Market Finder - a free online tool by Google. Simply type in your website name or app to discover our top market suggestions, plus consumer data for each region.

World Bank rankings

The World Bank has published its list of the best countries for ease of doing business. It’s based on a range of different factors such as the ease of starting a business, getting credit, and even dealing with construction permits. The top 5 countries are detailed below, and you can explore the full list here.

  1. New Zealand: According to the World Bank, New Zealand is the easiest place for doing business, and the best for starting a business too. While it’s ranked in 48th place for getting electricity, the ease with which you can register a property, get credit, and protect minority investors makes it highly appealing to organisations looking to expand their horizons.

  2. Singapore: Singapore is the 4th best place in the world for getting a business off the ground – and the best overall for enforcing contracts. It’s also among the frontrunners for protecting minority investors (3rd), paying taxes (7th), and dealing with construction permits (5th).

  3. Hong Kong SAR, China: In third place, Hong Kong is definitely one of the best foreign countries to do business in. It’s rated 1st for dealing with construction permits, 3rd for getting electricity, and 2nd for paying taxes. Yet despite its business-friendly environment, registering property there can be a hassle (51st place), and getting credit can also be challenging (37th place).

  4. Denmark: Another of the top countries to do business in, is Denmark. Overall, it’s rated 1st place for ease of trading across borders and 6th when it comes to resolving insolvency. Paying taxes is relatively trouble-free there too (8th place), while starting a business (45th) and gaining credit (48th) can be a little trickier.

  5. Korea: With its ease of getting electricity and enforcing contracts, Korea is undoubtedly an attractive proposition for any organisation looking to expand abroad. Dealing with construction permits is also a straightforward process, and its provision for paying taxes and protecting minority investors also make it among the best countries for business.

Conclusion

The key to explore the benefits of international market and doing business abroad is identifying the suitable markets for your products or services. Market Finder can help you do that. It is a free tool, designed to help businesses identify potential markets abroad based on the products/services they offer. The tool also offers useful features, guides and success stories to help businesses plan their operations and lay down their global marketing strategy. In addition to that, businesses can discover new potential partners that can help make their overseas expansion plans a success. Click here to discover your opportunities.