Our recent survey, Taking the Bull By the Horns: International Expansion Trends for 2022, clearly showed that corporate appetite for expansion is significant – 97% of respondents stated they plan to expand into at least one new market in the next two years.
This is an extraordinary figure, perhaps reflective of the extraordinary times we’re living in, though we’ve traditionally seen renewed activity after significant events (the 2008 global financial crisis, the 2000 internet crash, etc.). Businesses are always looking for new opportunities, as they should be, and these include ways to expand and grow into new markets.
Though growth in your home country can be relatively easy, expanding internationally brings risks, complexities and a multitude of different challenges. From knowing about the relevant legal, regulatory and tax considerations, to setting up SPVs, to understanding what technologies can aid your growth plans, to having the right talent in place to support you. And, once you’ve achieved expansion across multiple markets, how do you plan for the future and take your international expansion to the next level?
In most cases, companies look to expand overseas to capture market share – and 53% of our survey respondents said that market share has the biggest impact on the choice of country for expansion. But expansion is often costly and requires significant due diligence, market research and extensive risk assessment. Regulatory considerations labour laws and tax frameworks can affect entity type, structure, and even your choice of country. Though substance requirements within that country can cause further headaches.
Awareness of these potential barriers and challenges at the planning stage is essential, and is also why identifying a suitable, expert third-party provider should be high on your list of priorities.