Many popular expat destinations have lower taxes and living costs than places like the United States. This means that if you start your business overseas, your money will go a lot further. Moving to a foreign country can be an exciting opportunity, but the opportunity to start your own business once there is even more appealing for entrepreneurs.
Remember that not all countries provide the same opportunities and benefits. Do your homework before making a move so you know what to expect. Continue reading to learn the five main things you need to do to start a business as an expat.
Some countries, such as Singapore, make it extremely simple for expats to establish a new business. Others, however, do not. Before you relocate or become excited about the prospect of starting your own business, research local laws.
If you intend to stay in a country on an extended visa, understand what the visa allows for in terms of employment and business ownership. Some visas stipulate that you cannot start or invest in any type of business. Others permit you to own only a certain percentage of a company. Some visas are completely free of restrictions. Apply for the visa that will give you the most flexibility and the options you require.
Perform this research before you relocate. By learning the details before applying for your visa, you will avoid having to deal with any unpleasant surprises later on.
There isn't much you can do if you've already moved and are only now realising that your visa has some restrictions. Whatever you do, always follow local laws and adhere to any restrictions imposed by your visa.
Depending on where you move and what your visa allows, you might want to think about starting a business or buying an existing one. This is ideal for those who want to own a business but do not yet have a business idea. As an added bonus, purchasing an existing business eliminates much of the initial work, such as establishing the legal framework.
When you start your own business, you must do everything yourself, especially at first. However, purchasing a business allows you to take a more hands-off approach (if that is your preference). You may be able to invest without having to be a manager depending on the local business. However, you should never rely on someone else to manage your business unless you know you can trust them, so when investing in a foreign environment, do your homework.
Doing business in a foreign country and in a new market can be very different from doing business in your own country. This could be because of cultural differences, political climate, language barriers, business laws, and a slew of other impediments. Buying an already successful business can solve these problems.
When starting a business in another country, don't assume that just because a country is cheap to live in, it will also be cheap to run a business there. This is especially true if you intend to import or export goods. If you intend to manufacture, buy, or sell products, research import and export costs by category so that you know exactly what your rates will be.
Importing and exporting can be profitable if you understand the costs involved. Let's say you want to design and manufacture men's suit coats. To determine your total costs, you must first calculate the costs of materials, equipment, labour, duty, shipping, and other fees.
First, calculate the cost of purchasing or importing fabrics such as cotton, nylon, and wool. Consider the trims you'll need and how much you'll need to pay for things like buttons and zippers. Consider the cost of the machinery required to produce the product, such as sewing machines. Include the cost of materials such as needles and thread, as well as the cost of labour.
Determine how much it will cost you to sell the product once you have determined the cost of production. If you plan to export your products to another country, look into customs rates, duty charges, and shipping costs. Remember that you may have to pay additional fees to get your product out of one country and into another.
Every country has a different approach to taxable business income. Do your homework so you know exactly what your tax rates will be and what your reporting obligations will be. It's also critical to understand how taxes will affect your employees.
Contacting a local small-business accountant is the best way to conduct research. You can do the research yourself if you want, but hiring a local expert will save you a lot of time and potential headaches. This is especially true if you are relocating to a country that does not speak English. Even if you are familiar with common phrases, learning business jargon in a new language is a completely different ballgame.
Whether you start your own foreign business or buy an existing one, keep basic business fundamentals in mind. Being in a new, exciting country does not exempt you from using your business acumen.
That means, regardless of the country, you must develop a business plan.
All business plans should include a company description, market research, and information about the products or services you provide. Include information about how your company will be structured and who will run it. Outline your funding request and discuss your marketing and sales strategies, including projections. Every section of your strategy should consider the details discussed above, such as import/export costs and taxes.
Regardless of the country in which you intend to operate your business, developing a well-researched business model will make you appear to be a serious entity. Take the time to create one, and you'll be on your way to putting your company on the right track.
Starting a business in a new country can be an exciting opportunity for an expat. But that doesn't mean you won't encounter some difficulties along the way.
Make sure you understand the local regulations and have a visa that allows you to own a business. If you can't come up with your own business idea, consider purchasing an existing one. If you intend to buy, sell, or manufacture products, research import and export costs. Understand the tax laws and reporting requirements, as well as the fundamentals of business.
You'll need to do some research before you begin, and it's always best to do that research before making a move. You'll only be setting yourself up for success if you have a good idea and invest the time now to get your business off to a good start!
Reinvest the capital in the company as a loan rather than shares. It can pay you commercial interest on this and:
Do you live abroad and want to set up a business in the UK? Or would you like to set up a UK branch/UK office? Either way, you’re in the right place. Contact us, ask your questions, share your concerns, and our team of accountants will support you in setting up a business in the UK as an expat.
