Starting a business abroad, becoming a digital nomad or sending employees abroad is becoming very common these days. It has never been more attractive for profits, adventure, lifestyle and more for those with s been an attractive option for those with wanderlust for some time. But what about when you’re ready to launch a business that’s based in another country.
The thought of launching a business abroad is exciting, and the options are limitless. Many businesses are taking the next step in their business plans by opening an office abroad, but individuals are also wanting to become an expatriate by operating a new venture overseas as well.
But before you pack your bags, you have to be sure you’re ready for a new adventure! Here are our tips for getting off to a great start when it comes to getting your business started.
Tips for Starting a Business Abroad:
1. Do Your Research
The last thing you want to do is make all your plans, and move your life to a new country, only to find that local laws won’t permit you to do the work you want to do. You’ll want to pay attention to visa laws and regulations, as some visas won’t allow starting a business or even make any local income at all. Things like business ownership and data protection laws can vary widely from country to country. You don’t want to ruin your hard work by making a fatal mistake when it comes to something simple like email retention or registering your company with local authorities.
2. Establish a Home Base
Just as you need to set up your home with your photos, cherished knick-knacks, and favorite books, your business will need a place to call home as well. Whether you’re setting up an in-home office or you have a local workspace, you’ll need a mailing address for your new business. If you have a friend in country who can help you out, all the better, but if you’re on your own you’ll need to consider getting settled in quickly. (And don’t forget to check into whether you’re allowed to run a business from your home if that’s your plan.)
3. Know the Tax Rules
Navigating taxes as an expat is tricky no matter what. Adding business ownership and income to that can be even more overwhelming. Not only will you need to know the tax laws of your own country, but those of your host country as well. Making mistakes when it comes to taxes can land you in more trouble than you’d like! Don’t risk it – speak with an expat tax expert before you dive into the deep end.
4. Develop a Solid Business Plan
“Figure it out as we go” may be a decent plan for a day at a theme park, but it’s terrible advice for starting a business abroad. From researching local data related to your business to figuring out where your business should be located, your business plan should be airtight. Your business plan should be presented to a few experts who know your industry and your target location, and if you know what’s good for you, you’ll invite and consider their feedback.
You should be mindful to choose the right business structure, such as a branch office, joint venture or representative office if you have an existing business in home country. Again, obtaining skilled legal and tax advice will be crucial.
5. Nail Down Good Insurance
Insurance might not be on the top of your or your company’s list, but it should be. Both individual and corporate insurance plans are indispensable when becoming an entrepreneur abroad. With an expat insurance broker, you can help make sure that your insurance bases are covered, including emergency evacuation insurance, business travel insurance, and special risk insurance for countries that are more risky.
If your company is sending employees abroad, it is key that you have comprehensive health coverage for your employees as this is a key part of your duty of care. The overseas location may not have adequate healthcare insurance or health services and they may not even be available to expatriates. Most companies will put local employees on local health plans, but will put foreign nationals on global benefit plans as they often need to seek treatment regionally or back home. These highly valuable expat employees are also mobile and may need to be moved to a new expat destination, so coverage should be portable. Local health plans are not portable should your employee be moved from one country to another.
If you are sending one expat employee or you are sending yourself abroad to start a business, you will need to purchase an individual global health plan, which is offered via this website. There are a lot of coverage options to choose from, so contacting us or getting a quote online may be your best option. If your company has several expat employees, you may qualify for a global benefit plan that will provide superior underwriting, coverage and rates.
6. Be Flexible
While a solid business plan is important, the ability to adjust to unforeseen realities can make or break you. Moving to a new country brings with it an incredible amount of excitement, but also a lot of stress. Starting a new business? Same thing! Between living the expat life and launching a business, you’ll need to be ready to roll with the punches. Don’t count yourself out if something goes wrong – just flex with it and be ready to find a different solution.
7. Be Patient
The timeline you may have for your business in your home country may be very different from the timeline your new country will require. Give yourself space to learn things you couldn’t have known. Release yourself from the idea that success can only look one way – it’s better to let the process take time and do it well than rush for the illusion of a finish line that will only frustrate you.
It should also be noted that many countries are not as easy to open a business as it may be in your home country and they often put numerous barriers to entry and have lots of bureaucracy. You may want to check out The Wall Street Journal’s worst and best countries for business list. New Zealand, Singapore and Denmark were considered the top three. Some very difficult countries for business were countries such as Venezuela, DRC, and Ethiopia.
8. Network & Hire Consultants
Once you’re ready to roll, do as much as you can to make friends and network in your new country. Forming relationships with the locals will give you more insight to the local culture than any article or travel book could ever offer. Not only can new contacts offer you valuable insights, but they can also provide you with business connections that you couldn’t have found elsewhere. Many cities offer great opportunities to meet up with like-minded professionals, both forming casual friendships as well as potential business partnerships.
You may want to hire a consultant to assist you in opening a business in your expat destination country. This could include a legal advisor, fixer and immigration consultant.
9. Learn the Local Culture and Respect It
The best business plan in the world won’t help you if you don’t know how to connect with and respect locals. Take your time to observe how locals interact with each other including dealing with conflict, apologizing, offering feedback, and collaborating on projects. Some cultures may seem quite direct to you, while others may seem to take forever to get anything done. The more you can learn about relational dynamics in your host culture, the faster you will build rich relationships that will enhance your entrepreneurial experience.
Learning the local culture may also involve taking language classes so you can converse with the locals and avoid devastating language mistakes. Many cities offer various avenues to learn the language, and language exchanges can help you build community abroad as well as offer you information about your potential customers or clients.
10. Believe in Yourself & Your Business
If you’re doing something as exciting as starting a business in a different country, expect to deal with impostor syndrome somewhere along the way. In your entrepreneurship journey, you will meet people with fantastic ideas, seemingly endless financial resources, or incredibly charismatic personalities. Avoid the comparison trap and remember that you decided to do this for a reason. With the right tools and enough drive, you can make it!
