Since starting a new business domestically in the United States can be difficult enough, you may think that starting one abroad is even more so.
In reality, opening a business in another country isn’t necessarily more difficult, it’s just different, from the laws and regulations to the economic status to the political climate to the customs to name a few things.
As a result, there are few different tips you need to learn on starting a business abroad versus domestically.
Here are five critical tips for starting a new business in a foreign country:
Tip #1 – Research The Economic Situation of the Country
Determining whether a country is a good place to do business in can comes down to researching the economic status of that country. Ideally, the country should have a stable or growing economy and one that has been that way for the last several years.
The best countries to open up shop in will be ones that have low unemployment levels, strong consumer spending, low inflation, rising income levels, and a low debt-to-GDP ratio. Can you run a successful business out of a country with a stagnant economy? Yes, but it is also much more difficult.
Tip #2 – Research The Rules and Regulations
Different countries have different rules and regulations in regards to business, and these rules and regulations are also always shifting just as they are in the United States. Keep up to date on them and research them thoroughly before moving.
For example, beginning in May 25 of this year, the General Data Protection Regulation (GDPR) will become law and apply to all businesses operating within the EU or those who cater to EU citizens. Under the GDPR, you will have to receive express permission from customers to store and protect their data, and you will also face hefty fines for non-compliance.
Tip #3 – Hire A Translator
If you’re not fluent or at least conversant in the language of the country, you’re going to run into problems with the language barrier and hiring a translator will be a necessary expense so you can conduct business with the locals.
Since hiring a translator can undoubtedly be expensive, consider hiring someone who is fluent in both English and the local language and who can also help out with other tasks in your business. In essence, they would be a normal employee, only one who doubles as a translator.
Of course, you’ll want to spend time learning the language as best you can as well. While you can try to become conversant through studying now, the best way to learn a new language is simply to practice it daily in public in the country where it is spoken.
Tip #4 – Research The Political Climate
Business regulations are not the only thing that vary by country. The political atmosphere certainly varies significantly as well. Certain countries have a clear record of poorly protecting property rights (especially those that are owned by foreigners), and these are the countries that you will want to avoid at all costs.
Fortunately, there are also other countries that have solid protection of property rights for foreigners with a completely stable political environment. The best way to determine which countries are will be to check out the Index of International Property Rights.
Tip #5 – Be Aware of Cultural Differences
Customs are a big thing that vary from nation to nation as well. There are simply cultural norms in certain countries that may not make your business type a viable option there.
For all you know, there may not even be a demand for the products and/or services you’re planning on selling in an area of the country you were considering moving to, but there might be in another area.
The best way to learn about the customs of a country will be to take a visit to it before you open up your business. Spend some time there, explore the area, and interact with the locals and community. This way, you will be able to experience the customs firsthand, and you’ll know exactly what you’re getting into.
Starting A Business In A Foreign Country
If there’s one more piece of advice that could be given on starting a business abroad, it’s to take things slowly and be patient. Yes, it can be every exciting to be moving to another country and getting your new business started, but rushing the process doesn’t help. Your dream of starting your overseas business will happen even if not overnight.