Businesses decide to open new offices overseas for many reasons, such as to support new international clients or tap into a new market identified as having great potential. However, as beneficial as this move may be for business growth, you might not know how to ensure the setup process goes off without a hitch.
Before going full steam ahead with your exciting new project, prioritize some of the following things:
Pick a Suitable Location
When you don’t live in the country where you intend to offer services, it’s not always easy to know where to set up an office. For example, if you’re expanding to Australia, you may get locked into an expensive inner-city office lease when a Melbourne CBD coworking space would have been a far more suitable option.
Coworking spaces are generally a great way to start in a new country as they help you avoid complex and costly leases. Instead, you enjoy a low monthly fee with no lock-in contract. This gives you the freedom and flexibility to move to a permanent setup if and when it seems like a logical choice.
Choose a Leader
If you plan to establish yourself permanently in a new country and grow an international client base, having a leader in that country can often be necessary. A trusted employee with the drive and motivation to help your business succeed can be integral for ensuring your brand’s international expansion works seamlessly.
Find someone within your business who would be excited at the prospect of traveling and helping your business grow. Ensure that employee also has the necessary communication skills to set your business up for success in a foreign country.
Know Your Legal Requirements
You might assume that the most challenging part of setting up an overseas office is finding a suitable location and hiring an ideal team, but there can be more to the process. You also have to be aware of and abide by the legal requirements of the country where you’re establishing yourself.
If you were trying to expand into the United States, for example, you would need to legally register your business, apply for a federal tax identification number, and potentially register as a sales tax vendor. Companies trying to expand into Australia with a subsidiary would need an Australian business address, an Australian resident director, and an Australian governance structure.
Learn About the Country
You might be aware of the business benefits associated with international growth, such as higher sales numbers and extending your intellectual property rights. However, it’s important to consider your obligations in as much detail as the benefits you expect to enjoy.
Learn about the culture, the attitudes of customers and business associates, and the general expectations around business deals and social interactions that could make or break your reputation. Every country is different, and failure to research etiquette and culture might result in a steep learning curve that limits your initial success.
Make Sure the Numbers Work
Just because you want to grow your business doesn’t mean it makes sense for you to do it. Growth for the sake of growth can sometimes be a recipe for failure. So, before setting up a new office in another country, crunch the numbers and ensure the profit margins make sense once you factor in extra costs like taxes and lease agreements.
Setting up an office overseas can be exciting, especially when it allows you to welcome new customers into your business and experience unparalleled growth. However, it’s not always a straightforward process. So consider taking the actions above to ensure the best chance of success.