Guide to Global Expansion for Small and Medium Businesses

It is universally agreed that small and medium enterprises (SMEs) are the backbones of local economies. But being small doesn’t have to limit your market outreach. Thanks to innovations in technology and the support systems that evolved with them, businesses of any size can have a slice of the global pie. If you are ready to spread your wings and soar into the international marketplace, there are solutions available to help you succeed abroad.

Challenges of Establishing a Legal Entity Abroad

Just as there are rules of incorporation in the US that vary from state to state, when you open a company overseas, you have to comply with local regulations and standards. Entity formation in a foreign country can entail a mire of forms to be filled out, questions to be answered, and bureaucratic red tape to navigate. For some companies, overcoming the obstacles of local compliance can be a deterrent for international expansion.

In addition, international employment poses its own problems. Finding local qualified staff can be challenging, especially if there is a language barrier. Foreign governments often have rigid guidelines for employing locals, and even stiffer guidelines for sending your own staff members to work in a foreign country. Many SMEs lack the financial and human resources to overcome the challenges of setting up shop in another country.

Options for SMEs to break into the international market include:

Operating in foreign markets from your home country. You may be able to sell your goods and services abroad without leaving home, but doing so has its challenges. You will still need to find local employees to represent your interests, and managing, communicating and paying them will be difficult from a remote distance.
Going through established dealers or distributors to market your products. Identifying reliable business partners who are willing to handle your goods is another option. Just keep in mind that if you do find distributors you can depend on, you will still have to negotiate terms of doing business, manage shipping and inventory, and follow up on a daily basis to ensure your goods are reaching your target audience.
Establishing a foreign branch of your existing business, or setting up a local office. This option gives you more control, and ensures your interests are being represented and protected. However, be prepared to deal with local tax laws, legal red tape and obscure regulations for hiring local workers.

Fortunately, your SME does not have to be a trailblazer when embarking on foreign frontiers. Entities already exist to help you navigate the complexities of compliance, recruiting and staffing of your business entity in foreign lands.

Advantages of Working with a Global PEO

A Global professional employer organization (PEO) bridges the human resources gap for businesses who want to expand globally. Partnering your SME with a Global PEO gives you the tools to effectively manage risk and meet compliance requirements without having to form a legal entity in a foreign country. It allows you some wiggle room to explore your options and get established without draining your limited resources.

An International PEO can benefit your company in four key areas:

Hiring: A PEO can help you recruit and hire the best full-time sales talent without having to establish a legal entity. As a global employer of record, a PEO saves you from having to rely on temporary contractors with dispersed loyalties, and lets you form stable employer-employee relationships that breed loyalty and benefit your company in the long run.
Local compliance: The language, culture, customs and legal requirements of foreign countries can be overwhelming, making it a challenge to get your business up and running. A PEO already has systems in place in dozens of foreign countries to help you set up commerce with a minimum of hassles and red tape.
Cost: Getting established abroad can be costly, especially if you don’t know the language or the lay of the land. Fees and taxes for establishing a business entity can be prohibitive, and you are likely to make costly mistakes that delay your progress and result in unnecessary fees, fines and expenditures. A PEO can save you money by eliminating confusion and slashing through red tape.
Time: Establishing an office in a foreign country can be a long drawn out process wrought with paperwork and delays. A PEO can get you set up quickly with local sales representatives to work in your target markets without waiting for in-country incorporation formalities. A PEO can help you recruit and hire a reliable local sales force to represent your business in a relatively short amount of time.

Acumen International: Your SME Business Partner Abroad

If you are ready to test the waters of international commerce but hesitate due to limited resources and knowledge, Acumen International can help. We help SMEs operate in over 190 global markets by solving issues of staffing and compliance. Save money, time and headaches while you establish your brand and gain a local presence in foreign markets. Contact Acumen today, and learn how we can help your SME go global.