This post is for anyone who may be thinking about opening up a branch of a business abroad, or about starting a new business abroad. It covers the main points you should consider before you go from both legal and practical viewpoints.
- Firstly start with your local chamber of commerce. This should be number 1 whether you are starting a branch overseas from your home base, or moving there. They will have lots of information about local contacts and it is free.
- If you wish to move countries you need to make sure you can work in your chosen country. EU citizens can work in other EU states, but other foreign nationals wanting to work in the EU will probably need to set up a business, and will need to seek local legal advice in how to obtain a business visa to do this. Countries such as Canada, the United States, Australia and New Zealand only let a certain number of immigrants in each year. If you plan to move to the US you might be eligible for a business skills visa.
- Spend some time finding out just how different ‘things’ will actually be. One assumption a lot of businesses make is that opening up abroad will be very different, which is not always the case. Best to do your research to save yourself lots of time and money.
- Seek out local guidance by using the local Chamber of Commerce. They can help you with all the information you need. You will probably need a local lawyer, a local accountant and a local bank.
- Make sure there is a market for your business. You need to investigate your market exhaustively to determine if you have something someone there will take an interest in. This is no different to what you would do back home. Ask yourself what is the demand and where are there gaps in the market.
- If you are moving abroad, you need enough money to sustain yourself for at least a year. You must have enough money to get started. Most new businesses fail after 3 years because they have underestimated their cash requirements. So create a detailed business plan. Include facts and figures about the market, the area that you plan to trade in, competition – everything that will help you get a clear picture. Be conservative with your estimates. Include the costs of prospective trips to set up the business. Get this document translated into the local language.
- Find a local accountant to give you tax advice. You don’t want to be hit by local taxes that you knew nothing about. You need to live like a local and understand them, so you will need to learn local laws and tax systems. Also review your tax position in the country you will be leaving before you leave.
- Set up a foreign bank account. This is absolutely essential if you will require a bank loan. The bank will use your business plan to decide about the loan. In many countries you will be asked for security to put up against the loan, if the loan is significant.
- Protect yourself and your intellectual property. Your physical security may be at greater risk in a new country- do your research and assess how this may impact on you personally and on your business. If you genuinely have a unique product or a great logo, be sure to investigate necessary trademark protection in any country you’re considering. The issue of intellectual property is substantially different from one country to the next.
- Arbitrate don’t litigate. Make sure that any contracts you sign contain a locally enforceable arbitration clause to settle any dispute that may arise. This will save you both time and money, and may save you expensive lengthy trips for court cases. It also keeps the dispute private.
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Category: Business and Working Abroad