Taking a growing business to a new international market might look like the next big step for your company. If you’ve reached the point where you have business interests outside your own country, you’ve likely done well for yourself.
Unfortunately, doing business overseas can be a highly complex venture and often comes with increased risks that you might not have even considered. Everything from new markets, to differing tax structures, and even cultural expectations can give you a heap of problems you may not have considered. Here are some tips for reducing your financial risks when doing business overseas.
Make Sure You’re Well Informed
It is imperative that you make sure that you’ve gathered as much information as possible before you begin. At best, you’ll be dealing with different currencies and some language barriers. At worst, you can expect to deal with different manufacturing standards, legal requirements, and brand licensing issues. You should research everything from the market to the climate, cultural differences, tax policies, and a host of other things you may not have considered. If you can, find someone who has already made inroads into the country that you’re considering and ask them what pitfalls they ran into along the way.
Consider Your Insurance Interests
One of the biggest things you can do to protect yourself is to make sure that your insurance policies are equipped to deal with international problems. If an entire shipment of products goes missing while en route to or from another country, is it still covered? Do you need to buy extra insurance riders for international commerce? Do you have to set up separate insurance policies in each country that you choose to do business in? These questions can even depend on the country and mean you have to consider different options in certain countries.
Seek Legal Advice In Both Countries
Perhaps the best piece of advice is to make sure that you have legal representation on both ends. An international business lawyer may be well versed in how things work in your home country but it would be almost impossible for them to also be well versed in every other country that you might have dealings with. While a domestic lawyer can help you ensure that you don’t break any domestic laws, you should also find an expert locally when you begin to branch out.
Establish Strong Relationships
It’s important to really get to know your business partners, vendors, and clients. Establishing strong lines of communication and building trust between the parties can be critical to your success or failure. If you aren’t on good terms with someone, a simple mistake can be difficult to fix. If both parties are on the same page about things and acting in good faith, it is much easier to solve problems or deal with complications as they arise.
Pay Attention to Your Taxes
Taxes are one of the more complicated issues that you’re going to run into when handling international business issues. Which country do you pay which taxes to? Where can you claim certain deductions? How much of the income do you have to claim? These are just a few of the many questions that you may run into when you have foreign business interests of any kind. Make sure that you have a good accountant that has experience dealing with these types of business structures, who can help you make sure that you have all your bases covered. Just like with attorneys, it might be a good idea to work with accountants in both countries to ensure that you don’t make any costly mistakes.
Getting ready to take your business overseas is an overwhelming process. Taking steps to mitigate your financial risks is essential for a successful transition to becoming an international company.
Author Bio: Amanda Singh is a project manager, working as a part of the team behind Sitecraft, an experienced materials handling equipment provider. Overseeing numerous projects and working with different teams has provided Amanda with experience, which she now shares with other team leaders and managers out there.