What is a Global Expansion Strategy?
Looking to grow your business? A global expansion strategy is an effective method for business growth, creating a presence in new, international markets.
When done correctly, a global expansion strategy means:
Increased Brand Awareness
Larger Market Share
Scaling your business, however, requires meticulous planning and extensive knowledge of the employment and tax laws of the local market you’re entering. This process can be time-consuming and complicated, but the advantages of a global expansion strategy far outweigh the disadvantages. When your company is ready to take the leap into a new market, Atlas has the tools and support to help navigate your business into a new region.
Benefits of Expanding into New Markets
International Customer Base
One of the most obvious advantages of global expansion is an expanded customer reach. By diversifying your audience, your company no longer solely relies on a domestic market, which may be oversaturated. This untapped market has the potential to translate to increased revenue.
Access to a Larger Talent Pool
Moving into a new country doesn’t necessarily mean your domestic employees are obligated to move to the new market. A different approach is to localize your new base with employees from this new market—employees who speak the local language and understand the local customs. This gives your company access to a diverse pool of talent that likely has a different perspective on marketing to local customers.
Cost-Effective Manufacturing and Production
Moving production out of the U.S. has long been a way to reduce overall business costs. While this doesn’t necessarily mean that the entire business must move closer to the production site, it is often a solution to have an employee in the immediate region to oversee the supply chain.
China has long been popular for its low-cost production but India and several countries throughout Southeast Asia should be considered for reduced manufacturing costs.
Governments around the world offer companies generous incentives to attract foreign businesses to establish operations there. This helps determine which country is the most suitable and could mean a business is entitled to grants, subsidies or tax incentives. For example, the Malaysian government offers a 50-cent subsidy for every USD 1 spent on research and development (R&D). The Philippines offers incentives for companies working in the sustainability space. Several countries in Africa offer tax allowances and reductions for job creation within exports and manufacturing.
How to Choose the Top Countries for Global Expansion
Determining which country to expand to is a major factor in a company’s global expansion strategy. This requires in-depth research or a third-party advisor to consult on the most suitable country for your needs. Among other factors, you’ll also need to consider the market and whether it’s ideal for your service or product, the bureaucratic process of entering the country, tax and business regulations of operating in the country and timing.
New Zealand is noteworthy for its overall ease of conducting business. Registering a limited liability company (LLC) can be done quickly and conveniently online, generally taking less than a day. A small fee of 115 New Zealand dollars (NZD) applies. This is a stark difference compared to Venezuela, where it can take months to process an application to establish a business. The red tape surrounding the establishment of a company is made more challenging by political and economic instability.
Singapore, the sovereign city-state located in Southeast Asia, is also notable for its business-friendly regulations, making it easy to set up an LLC. For example, online registration generally takes two days. More importantly, the government offers a wide range of tax incentives. A 25% tax write-off is granted to companies qualifying under the mergers and acquisitions allowance within a specified period and subject to a cap of 5 million Singapore dollars (SGD). Other subsidies incentivize technology, intellectual property development and financial services, among other sectors.
From an economic standpoint, the former soviet republic of Georgia, situated strategically at the intersection of western Asia and Eastern Europe, has expanded rapidly in recent years. While improving its economy, the country focused on developing free trade agreements and attracting foreign direct investment (FDI). Today, a company can generally register itself in one day. Georgia offers businesses a favorable climate to work in and has one of the lowest overall tax rates globally and a social security contribution of only 2%.
Other favorable countries to expand a business include Hong Kong, Denmark and South Korea, all ranking high on the World Bank’s Doing Business Index.
Envision Your Global Reach
Search our database of countries where we’re ready to partner with you to onboard employees.
How Atlas Can Help
Simplify the Complexity
Setting up a new legal entity in a different market can be complex and time-consuming. Before embarking on expansion into a new market, it is crucial to fully understand your company’s needs and the country’s business regulations, along with the economic and political climate of the new market. The implications of a global expansion plan done incorrectly can be damaging, leading to penalties and fines, delays and harm to your company’s reputation and its bottom line. But there are solutions to ease the complexity of the global expansion process.
Using an Employer of Record (EOR), such as Atlas, lets you focus on marketing your products and services in the new country, while the EOR steps in and acts as the legal employer. Your company avoids the time spent setting up a legal entity in the new market. Instead, an EOR assumes all liability and responsibilities for a company’s employees. While onboarding and paying local employees are taken care of by an EOR, the typical day-to-day task management is still fully in your control.
Along the way, Atlas keeps you informed of the latest legal updates to regulations to ensure that your company is compliant with all local laws.
One of the most significant benefits of an EOR is speed to market. On average, it can take up to 20 weeks to create a local entity—often longer. Atlas can help reduce that period because the legal entity is already available, cutting the timeline to as little as four weeks. Any further challenges that may arise from travel restrictions can also be avoided.
How to Get Started
There are several different approaches Atlas can take to help you expand into a new market. If you're struggling with how to kick off your expansion strategy, perhaps the first step is acquiring some knowledge of the market’s business and tax laws. Through the Atlas platform, you’ll find all the verified intelligence necessary to make informed decisions. This includes information on labor laws, salaries, employer taxes, visa requirements, business regulations, the local talent pool—and more. You can even compare multiple potential markets to determine the best fit for your company. Then, when you’re ready for the next step, Atlas can guide you through the process.
Ready to learn more?