Doing Business Overseas Is Not Easy, Here’s Why
There may be a number of obvious financial incentives for taking your business overseas, including decreased labor costs and lower business taxes. However, before making any decision, it’s important to also take into account all the possible challenges you may face when doing business in another country. These challenges – infrastructure concerns, legal concerns, and also language and cultural differences – all add up to show you that creating an overseas business plan may not be as easy as you thought.
One of the basic foundations of any business is infrastructure, and something that feels as “basic” to us as reliable internet may not be available overseas. Natural disasters may also be a problem overseas, since they can destroy or damage infrastructure. Some parts of the world are more prone to such disasters, including floods and earthquakes. There may also be challenges with roads, like if they are few, go over dangerous terrains, are narrow, or aren’t regularly cleared of debris. Finally, power sources may be limited overseas, and weather and climate conditions may be suboptimal for some types of infrastructure.
Running a business overseas, you’re going to come up against a whole new legal and tax system, and one possibly quite different from what you’re used to. You’re probably going to a need both a lawyer and accountant familiar with the laws and taxes in your new place of business, and to consult them on a regular basis. This will drive up your operating cost, which might be especially challenging to fit into your business plan if you’re a new business owner.
Language/ Cultural Differences
A language barrier can be one of the biggest obstacles in doing business overseas, and translation services can get expensive. Even if you and your employees speak the other language, if your fluency is not at a native/ near-native level, misunderstanding or communication difficulties will probably come up at least from time to time. In addition to this, another country may have a variety of cultural differences from the USA that come up in business, such as gender rights and rules of etiquette.
Taking your business overseas may very well be a viable option for you, but you cannot take anything for granted or expect that the move will be an easy one. Instead, thoroughly research the infrastructure and basic legal structure of the overseas country you’re interested in, as well as their social and business culture, and come up with a business plan. Only when you have all the facts can you decide whether moving or expanding overseas is the right step for your business.