Cultural differences are often cited as a key challenge in international expansion. In our 2022 Private Equity Survey, for example, 40% of respondents said cultural differences were a major challenge for firms engaging in cross-border deals.

We agree, it can be difficult to navigate new locations, new cultures, and understand new business environments. But those very differences often prove to be assets – reinvigorating your company and bringing positive change to company culture.

In our increasingly global business landscape, every country is unique, with its own distinct culture, business fabric, and unique specificities; learning to navigate cultural differences is essential for your global expansion.

Claudia Nunes, Director of International Corporations, takes a look at how.

Travel brings leadership skills

At its heart, seeing new places and experiencing new cultures exposes you to different ways of doing things, and this is true of travel for business as much as travel for pleasure. And, though these can vary widely within your own country, the total immersion that travelling provides takes this exposure to a whole new level.

Getting among a new culture also underlines the fact that people are people. Understanding different cultures and different ways of living and working promotes empathy and reflection – both essential skills for leaders.

And you’ll find that leaders who’ve travelled, who’ve broadened their minds and tackled the unfamiliar, are also more open to change. They realise there’s more than one way of doing things and aren’t scared of new ideas.

Tackling communication

One of the biggest challenges of international expansion is the language barrier. Yes, it can be difficult, but language barriers should never stop you from carrying out your business.

Though you’ll probably find many to be multilingual, given English is becoming the international language of business, sourcing a local expert (even a translator or guide) can help with any barriers – and their local knowledge is one of the best ways to learn the characteristics of a new culture. Having experts on the ground who speak the language can also provide additional benefits like relationship building, openness and proving credibility.

Going further and signing up a local strategic business partner can help you navigate not just the language, but also local legislation, tax and employment laws. Each country comes with its own different ways of working, and different health and safety regulations. Managing the cultural component of each country is essential for complying with the specific requirements of the location you’re entering.

A local business partner can also provide important introductions (banks, suppliers, etc.), recommend local collaborators (directors, lawyers, etc.) and give you a roadmap for local best practice.

New cultures bring new perspectives

Cultural differences in international business give access to new cultures and brings new perspectives to your firm, along with new ideas and (possibly even) new solutions.

Every culture has a slightly different perspective; every nation looks at things, and does things, a different way. Taking the time to understand new cultures – local customs, business practices , etc, – can often highlight things that could be improved in your company.

Accessing a new country can provide both inspiration for and advice on how to reinvigorate your company’s processes, marketing, and even your company culture. It may even provide inspiration for new products or services.

Multiculturalism brings mutual respect

Multiculturalism means different cultural norms or racial groups have equal rights and opportunities, and all are equally important – no worker is disrespected, marginalised, or insignificant.

While this is a key tenet in our modern business landscape, there are distinct benefits to creating more diversity in your workforce.

As well as the prospect of new perspectives and viewpoints, hiring workers from new countries provides both personal and professional development for your staff. A multicultural workforce brings new opportunities to learn, both about the business and the wider world, and encourages empathy and inclusion at all levels of the company.

Cultural differences help grow global businesses

Cultural differences aren’t a barrier – they’re a completely beneficial experience, an asset to personal and professional growth at all levels of business. Understanding, adapting and navigating cultural differences is an essential consideration when looking to expand across borders and should be a top priority for senior decision-makers. In our ‘Guide to Global Expansion’, we cover navigating cultural differences and our top tips for expanding into new countries and cultures. To access our guide, click here.

Auxadi have over 350 employees and can service clients in over 50 jurisdictions across the globe. Our expert team members have the local knowledge to take care of all your accounting, tax compliance and payroll needs so you can focus on your global expansion and business growth. They understand local tax, legal and regulatory obligations and can help you navigate them with ease. And, through our unique MySPV technology platform, our service delivery is seamless and efficient no matter where you’re based.

To find out exactly how our global team of experts can help with your international expansion, get in touch today.

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Claudia Nunes

Claudia Nunes
Director International Corporations

Local Knowledge – International Coverage

Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.

All information contained in this publication is up to date on 2022. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.