Growing Global

A Guide to International Expansion

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1. Cross border considerations

2. Company set up

3. Technology

4. People and talent

5. Office space

6. Next level expansion

Conclusion

Introduction

Our recent survey, Taking the Bull By the Horns: International Expansion Trends for 2022, clearly showed that corporate appetite for expansion is significant – 97% of respondents stated they plan to expand into at least one new market in the next two years.

This is an extraordinary figure, perhaps reflective of the extraordinary times we’re living in, though we’ve traditionally seen renewed activity after significant events (the 2008 global financial crisis, the 2000 internet crash, etc.). Businesses are always looking for new opportunities, as they should be, and these include ways to expand and grow into new markets.

Though growth in your home country can be relatively easy, expanding internationally brings risks, complexities and a multitude of different challenges. From knowing about the relevant legal, regulatory and tax considerations, to setting up SPVs, to understanding what technologies can aid your growth plans, to having the right talent in place to support you. And, once you’ve achieved expansion across multiple markets, how do you plan for the future and take your international expansion to the next level?

In most cases, companies look to expand overseas to capture market share – and 53% of our survey respondents said that market share has the biggest impact on the choice of country for expansion. But expansion is often costly and requires significant due diligence, market research and extensive risk assessment. Regulatory considerations labour laws and tax frameworks can affect entity type, structure, and even your choice of country. Though substance requirements within that country can cause further headaches.

Awareness of these potential barriers and challenges at the planning stage is essential, and is also why identifying a suitable, expert third-party provider should be high on your list of priorities.

0%
of respondents stated they plan to expand into at least one new market in the next two years
0%
of our survey respondents said that market share has the biggest impact on the choice of country for expansion

Today, new technologies have facilitated real-time interaction, communication, and availability of information. They have also removed some barriers to entry, but raised competitiveness. The opportunities have multiplied, but so have the challenges and variables.

This complexity also has consequences on a company’s own internal dynamics. International expansion is an interdisciplinary and multi-area project, where various profiles play a decisive role: from the Board of Directors, through the CEO, CFO, CTO, COO, CHRO, and M&A managers, among others. Thus, today’s organisational leader who wants to have an active presence in a cross-border project must be a people manager, data expert, skilled in business strategy, have the ability to operate in multicultural environments, have technology skills… The list goes on.

With this in mind, we present ‘Growing Global: A Guide to International Expansion’ where we highlight the main areas of consideration for companies looking to undertake international expansion, as well as the key challenges you may face. 

Familiarising yourself with all of these key considerations before embarking on an international venture can seem daunting. But with experienced partners at your side, partners who understand the necessary steps and are always focused on your needs, you can begin to lay solid foundations for your success.

Auxadi’s mission is to make life easier for our clients. And we’re trusted by some of the world’s largest corporations.

Claudia Nunes
Director International Corporations
cns@auxadi.com

A significant part of our success as a leading provider to multinational corporations is taking as much administrative ‘weight’ off your shoulders as possible – so that you can focus on your growth and expansion strategy.

We’re fortunate to have input in this guide from other industry leaders. Their contributions provide additional valuable insight on the various stages for achieving international expansion and we’re thankful for their participation.

We hope you find this guide useful and insightful – that it’ll inspire you to kick start your expansion plans and encourage you to enlist the right partners to help you on your path to international success.

And, as always, if you have any queries on this guide or would like any more information on anything we discuss, just get in touch.

Kick-starting Your Multi-country Expansion

While international expansion is an exciting and important milestone for your company’s journey, it can also be an extremely stressful and daunting prospect – especially if you’re expanding into multiple jurisdictions at the same time.

Here are a few common questions to consider for a smooth multi-country expansion:

  • Which type of entity is right for my activities?
  • Are there regulatory differences between a country’s regions/states?
  • Any government grants available for certain regions and certain products/services?
  • How long will it take to incorporate my company?
  • How long will it take to open a bank account? (Often required before incorporation.)
  • Are there double taxation treaties in place with my home country?
  • Are there any specific tax requirements or benefits for my sector?
  • How should I manage transfer pricing? Are there specific transfer pricing regulations?
  • What do I need to know about customs excise / indirect taxes (VAT/GST, sales tax, etc.)?
  • What’s the minimum wage?
  • What are the required employee benefits?
  • Are there restrictions on how many foreign staff I can have?
  • Are there specific labour laws to be aware of (sector/region, etc.)?
  • Which accounting standard is used for regulatory filings (IFRS/U.S. GAAP/local GAAP)?
  • What’s the potential impact of operating in multiple currencies?
  • What’s the risk of currency devaluation/hyperinflation?
  • What are the audit requirements for my company in the country?
  • What should I consider when consolidating my reporting?
  • What’s the business language of the country?
  • What’s the local business etiquette? What cultural differences should I be aware of?
  • Any specific privacy regulations that will dictate how we treat data?
  • Are there any regulatory requirements that could cause issues?

Remaining on top of all this while still focusing on adding-value and growing your global business can be a real challenge.

Here are some top tips to ensure the process of expanding into multiple countries is as seamless and as stress-free as can be:

Seek local advice

Get experts on the ground who know the rules, restrictions and understand the local processes. This can be the difference between a headache and an easy win

Knowledge is power

Make sure you’ve done your research so you know what the tax, legal and regulatory requirements are (and source the right providers who can help).

Outsource, outsource, outsource!

While it’s an upfront cost, outsourcing those burdensome back-office tasks will save you time, money, resources and many headaches down the line.

Be prepared

Careful, early planning is crucial to success.

Leave yourself time

As even simple tasks can become difficult when you factor in multiple currencies, coordinating resources across multiple jurisdictions, and ensuring compliance with multiple regulators.

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