This article is written by William L. – a small business owner and entrepreneur who writes about startups, technology, and smart money management.
If you think that starting a business in your home country is difficult, multiply that by several times to get a grasp on just how hard it is to open a business abroad. Of course, just because something’s difficult, it doesn’t mean you shouldn’t pursue it – you simply need to be fully cognizant of the challenges that you will face.
Before you traipse into a foreign country and start filling out business paperwork, be sure to follow these tips:
1. Research Business Practices
Business laws and practices, banking, and taxation all vary from country to country. While you can set up a business in New Zealand in a single day, it could take weeks or even months in other countries. Before you make a move and get started, study the laws and requirements for the country you’re interested in, and investigate how much it will cost to incorporate, acquire property, and start working.
2. Study Cultural Differences
Fitness may be big business in the United States, but it’s unlikely to have the same draw in certain Middle Eastern countries. You need to understand cultural differences that could affect your business’s viability. Research the culture surrounding the product or service you’ll be selling to ensure that there’s a market and a need for it.
But that’s not the only cultural difference to study – from language barriers to varied social interaction, an expat is likely to experience difficulty fitting into a foreign business community. Consider taking a few short trips abroad to get your bearings and start interacting with the local community.
3. Understand the Country’s Political Climate
It’s very important that you understand the political climate of the country you’re entering, as well as its history regarding taxation and asset seizure. For instance, in 2013, as the European Union was bailing out banks in Cyprus, the Cyprus government went directly into bankers’ accounts, removing up to 10% of the funds deposited within and calling it a “tax.” As a business owner in a foreign country, you don’t want to be in a position where your profits are unexpectedly “taxed” or your assets are seized because the political climate is undergoing change. Watch carefully, and do your best to work within a country with a stable political and economic system.
4. Seek Legal Advice
It’s always a good idea to hire a lawyer when starting a business, and this is especially true when starting a business abroad. Locate an expat lawyer from your country who is living and working in the country to which you hope to move. This way you’ll know that the lawyer understands you culturally, but has the knowledge and skills to help you navigate the foreign environment.
5. Seek Local Guidance
Just like you might get involved with the Chamber of Commerce or Small Business Association in the U.S., you should seek to get involved with other business owners in the country where you plan to open your business. Start this process before moving so you have a few trusted friends whom you can go to with questions as you get your business underway.
6. Give Yourself Time
Even if you’re excited about moving abroad and getting your business started, remember that all good things take time. Don’t rush the process. Give yourself time to research, seek trusted counsel, and navigate the ins and outs of moving abroad. Remember that you also have to apply for and receive the appropriate visas, so don’t expect things to come together overnight.
Some countries are better for start ups than others. If you’re looking to speed the process, consider Inc.’s top four countries for business startups: Singapore, Canada, Australia, and New Zealand.
Where do you want to start a business abroad? What are you most nervous about?