DIY global expansion: Strategies for international growth

Global expansion... how hard could it be?

Turns out, it’s pretty difficult. But for those organizations set on the DIY approach to international growth, we’ve outlined some key preparations to ensure you’re ready for success.

Like any do it yourself project, there are always hidden costs or unforeseen challenges that can delay or derail the project. One way to avoid these obstacles is to work with experts who  understand the local laws and regulations for each target market.

What’s included in the DIY global expansion ebook?

Are you planning to set up your own legal entity in a new country? Many companies trust their team of lawyers to handle the incorporation and setup of their businesses overseas. But lawyers can only do so much. Usually, lawyers can only incorporate a business but are unable to register the newly formed business for various taxes, etc.—and are surely unable to set up the payroll and HR side of things. Think of it as getting a car without an engine; if it doesn’t turn on, it is useless.

This section of our ebook will go into detail on the steps required to incorporate your business. We also outline potential pitfalls to be aware of. Mistakes with entity establishment can lead to costly issues in the future.

Hiring complexity can vary from country to country. But extensive employment contracts or negotiations with collective bargaining agreements are typical in many countries. The employer must include all required provisions within the contract when hiring candidates, which means you can’t just use a generic contract template you find online.

Sounds easy enough, right? Not exactly. To put it into perspective, a lack of compliance puts your local director at risk. Often the local director is the CEO or other executive of the company. If a local government finds out a company hasn’t been compliant, the local director could be arrested. We don’t want that.

Payroll and accounting become even more complicated in the international marketplace. Some companies may think that because they have limited employees or expenses in a country, they can consolidate their accounting. This is dangerous and could put the entire company at risk of compliance violations.

Again, this is just something to be aware of as you plan your DIY global expansion. Finances will always be a complicated and time-consuming project. Adding additional foreign markets to the mix will only increase that complexity.

For those who love navigating the various tax codes around the world, the DIY global expansion approach won’t be a problem. Managing global tax and compliance is complex, especially when dealing with multiple jurisdictions where keeping track of changing laws, deadlines and requirements can often require a small army of specialists.

Companies also need to understand that if they operate in multiple countries, they will need to hire multiple vendors (anywhere from five to 15 vendors per country). As they continue to expand into new countries, it becomes cumbersome to manage multiple vendors across the world. This makes it much harder for a business to coordinate and make informed decisions.

Just like any DIY project, expect it to take some time to learn the ropes. Though not impossible, we don’t recommend the DIY global expansion approach. There’s simply too much complexity and risk of employment or other regulatory violations.

Learn more about how we can support your global expansion efforts by speaking to a global solutions advisor about your growth plans.