Setting up a business overseas and jet-setting to meetings may sound sexy but if it is not well thought through, it can be the downfall of a good company. Of course, desk research to establish your potential market is essential but first you must decide what you wish to achieve by moving or expanding part of your operations overseas.
Then you need to think about whether you wish to retain complete control of the process yourself or whether it makes more sense to license it to a third party. Do you have first-hand knowledge of an appropriate market, could you buy in that knowledge and expertise and do you want to invest your money in staff, property, etc in that location? Decide what vehicle you will use to make the investment. Will you:
- form your own company (a subsidiary, sister or independent company) in the chosen location?
- create a joint venture with a local partner?
- franchise your product or service through a local company?
You must establish a business plan and calculate the expected returns for the new business. Then it is time to make the first visit, to obtain a first-hand impression of the place, establish contacts and to choose a lawyer who will help you to understand fully the labour and commercial law applicable to that market, as well as the appropriate fiscal regime.
Feasibility studies are a must. Do your homework and the rewards could be great.