If you are thinking of relocating abroad, there’s also a high likelihood you are seeking to build a new business opportunity. This is largely due to the potentially lucrative financial rewards associated with this scenario. In this article we explore 8 things you should know before starting a business an an expat.
The circumstances that govern any commercial undertaking in a foreign country present a ‘double-edged-sword’. An expansive scope of vacillating variables offer simultaneous opportunities and risk factors. In mitigating your exposure, you should engage in rigorous research and intensive planning before you begin operating as an expat business owner in earnest.
1. The economic landscape
Taking stock of the prevalent economic conditions in the region in which you intend to operate is one of the first steps in formulating your business structure. Understanding the system of exchange rates will allow you to get a grasp on your advantage in the global marketplace.
After all, the money that your business makes will be relative to the currency fluctuations between your country of origin and the locality in which your operate abroad. You can access current exchange rates and trends online. For example, this page displaying cba exchange rates offers useful data and analysis — especially if you are transferring money to/in Australia.
2. Your legal obligations
It is necessary to have a working knowledge of all your legal obligations before you set up a business overseas. This covers the conditions of a visa — especially if one will allow you to run a business entity in the first place. Also, you may need to consider import/export laws for raw products and finished goods you may sell across international markets.
Avoid common pitfalls, such as the assumption that you will be permitted by a foreign country to start a business that you can own in full — some governments actually prescribe that you have a local business partner, or will only allow you to have a minority share. You can check the full details of visa requirements and laws via this handy relocation guide.
3. How to formulate a business plan
It is crucial to ‘get down to the nitty gritty’ with a business plan that addresses the the unique characteristics of your intended premises abroad. Make sure you analyse the market in which you intend to operate on both a quantitative and qualitative basis.
Formulate a specialised immigration business plan that assesses such considerations as product/service range, pricing structure and competitor analysis. Plus, factor in any other specialised components applicable to the foreign region in which you intend to commercially operate.
4. How to manage your capital expenses and cash flow
Starting any business requires enough capital and projected cash flow to get you through those difficult first years of operation. When you compound the equation by bringing a foreign aspect into the mix, you have an even stronger need to cover all bases financially.
Look into international transfer rates and associated charges concerning accounts and loans, as well as any currency restrictions and how this may impact your cash flow. Be stringent with your forecasting and in producing a plan to manage unnecessary expenditure.
5. Your taxation requirements
You can’t afford to overlook any aspect of relevant taxation legislation. This encompasses import-export duty, sales tax and customs and excise fees. Plus, any taxes that are vary according to regions, such as value added tax (VAT) or goods and services tax (GST). If you have employees you will need to manage payroll in accordance with a set of foreign laws — which will take some adjusting.
Reporting requirements can be very strict, whilst often being more than a little confusing to an outsider. Research relevant governmental information online and/or by visiting official departments in person where possible. And, consider hiring a reputable local accountant to take care of all the intricacies of taxation law on your behalf.
6. The most effective way to communicate
It might seem like a ‘no brainer’, but being able to communicate effectively is so important when operating any commercial enterprise. As an expat business owner, it is always a good idea to have an understanding of the native tongue. Even if your employees are likely to do most of the talking with your customers, you will still need to be able to negotiate with suppliers and other parties.
You stand to lose a lot in translation if you do not have a grasp of the local language — especially when it comes to the ‘chain of command’. Consider taking a language class, as well as listening to audio and all the many aspects of e learning (such as apps, videos, quizzes, activities and more) should you need to bridge this gap.
7. How to network and attract engagement
Knowing how to build a flourishing network in your new country is key to your business success. You will need to ‘establish inroads’ in order to generate effective sales funnels and build your brand presence. Undoubtedly, you will need to advertise your goods and services. You may even want to consider employing a PR firm.
Keep in mind that your marketing efforts and your overall approach in engaging the public will need to reflect prevailing cultural trends. Try reaching out to community leaders, attending events and getting involved in charity endeavours. This will spread a positive message about your business within your budding customer base in your chosen location abroad.
8. Your limitations and how to motivate yourself
Before you launch into a startup exercise as an immigrant, you should make sure you have enough drive and resilience to see the entire process through. Scrutinise your original business idea and the level of determination you have in taking this leap. Be honest about your obstacles and the toll of your other commitments.
Always think about your long-term goals and how to best conserve resources for ‘the long game’. You will need a deep well of both fortitude and aptitude to keep pushing through the barriers — these are inevitable. Rome wasn’t built in a day, and your expat empire won’t be either.
The above guide functions as a primer in what you will need to know before starting a business as an expat. However, it is by no means exhaustive. Remember that methodical planning will assist you greatly. From there, practical experience will be the greatest teacher and your adaptability will be the best measure of your success.