Its an exciting time to be in global business, but it can have its challenges. One of them is that each country or trade zone is governed by its own sets of regulations for conducting business, particularly when importing or exporting products. If you want to do business in another country, you must abide by its rules. Add in the mix of language, culture and geographical influences we all encounter abroad, and it’s a heady cocktail to savor.
When you start thinking about doing business outside your headquarter country, it’s best to remember a few key tips.
• Doing business abroad will be unlike doing business at home. Don’t take anything for granted.
• As we’ve said, read up about the target country in general, so you have a feel for current events, politics, trends and the economy, geography, history and culture, including its customs and courtesies.
• Educate yourself about your own industry sector in the target country via trade journals, online resources, your government’s commercial attachés.
• Get reliable tax advice. For instance, if you are a US company, no matter where in the world you operate, you must still follow US regulations regarding compliance, financial and legal obligations. You must still pay US taxes, even for revenue from your offices outside the US, as long as you are a company incorporated within the US.
• With all your research complete, draw up a complete business plan and review it with a tax expert and a lawyer familiar with the target country. If your usual attorney is not versed in the area, he can recommend a qualified one.
Despite the fact that the international aspect of this business sounds—and is—really cool, it significantly increases the complexity and risks you face. If you see opportunity out there, you will encounter all the usual business issues, with the added layer of at least one completely different country (with perhaps significantly different jurisdiction) to also consider.
So it should come as no surprise that we emphatically recommend that you educate yourself, get reliable advice, and develop a business plan before you make any commitment to international business. By that we mean a plan for your first venture, and then separate plans for new territories as you expand.
At this point you probably are having second thoughts, at least about pulling together a sound business plan. Don’t feel pressed to rush through this, and do get advice from your network and your legal and tax advisors to help fill in the blanks. Doing this will reduce the number of blanks left, highlighting the remaining ones, so you can see what you’ll need to find out and weigh before you take binding decisions.