Is global expansion the next step in your organization’s journey?
The world has become the marketplace for organizations large and small, and many companies have made the decision to pursue international expansion. Whether you’re seeking to expand your customer base globally, provide a service to meet new demands locally or in overseas markets, or find the right talent to meet new strategic goals, there are many international expansion benefits that make it a solution worth considering.
However, there are also many considerations to take into account before expanding into new international markets. Setting up international operations requires understanding more than just the language. Organizations seeking to capitalize on the benefits of global expansion must also navigate regulatory and compliance issues, manage international payroll and even understand the cultural norms of the region. But with the guidance of a trusted partner, global expansion not only is possible, it can be done quickly and compliantly.
Here are five things for your organization to consider as you begin planning your global expansion strategy.
1. Entity setup
Are you looking to create a brick-and-mortar location abroad? There are many requirements to understand about entity establishment before you start checking office space vacancies for your expansion plan.
Tax law in the region may be complex and difficult to interpret. Other issues for business may be at play, including setup costs and banking requirements. If your international expansion strategy doesn’t require a location as much as it does talent, you may be able to hire remote employees. But if you plan on hiring workers directly, and they live in the country where you plan to do business, you’ll still need an entity to employ them, and your entity must comply with all HR regulations in the target market.
2. Local talent
While talent pools may be shrinking in the U.S., the international employment market may be more favorable for employers. Finding boots on the ground in multiple countries is another consideration for your global expansion strategy.
Online interviews make it easier to hire international employees, no matter where they are or what their time zone may be, but you may need help verifying credentials and experience for new hires, onboarding workers and managing them remotely.
3. Employee wages
When it comes to paying international employees, where they live plays a significant role in what that process will be. Employees expect to be paid correctly and in their own currency, so if you plan on hiring directly, your organization must have the entity in place to pay them compliantly, as well as the local expertise to ensure all tax and benefit withholdings are correct. And beyond paying workers compliantly, to realize full global expansion benefits, it's important to consider international salary data and pay them in line with the local market so you can attract and retain the best talent. Having the best talent will be a competitive advantage in any emerging market.
Even if you plan on using independent contractors and don’t plan on setting up an entity, you still must be sure you’re adhering to all local regulations governing pay and taxes, as well as legislation defining employment—because you don’t want to risk employee misclassification and the ensuing penalties.
4. Employment regulations
Each country has its own employment regulations that spell out worker rights and protections. Understanding HR compliance and your responsibilities as an employer in your target market is critical, because you’ll want to make sure you’re protecting employee rights as well as your organization.
Sometimes even subtle nuances to employment laws can mean the difference between compliance and penalties, fines—or even jail time—for noncompliance.
5. Benefits requirements
Even if the benefits required or expected in the countries you’re eyeing for your global expansion strategy are similar to those where you’re currently doing business—it’s more likely they’re not—you’ll need to be sure you’re in compliance.
International benefits and compensation to consider include observance of paid holidays, parental or maternity leave options, and healthcare coverage. A consideration with healthcare, for example, is to be aware of what national health services may be available in your target market—you may only need to offer supplemental coverage.
A trusted advisor for your global expansion strategy
Partnering with a trusted advisor who’s already navigated the international business and employment landscape can help you overcome any hurdles you encounter on your road to global expansion. Look for an organization that has local expertise and an established footprint in countries on your strategic growth plan. Not only should they be fluent in the language of your target market, but also in the culture, payroll and benefits requirements, so you can enter new markets compliantly and realize true global expansion benefits.
Your goal is to expand your business and market share, not spend countless hours learning what’s required to do so. Contact us today to speak with a global solutions advisor and learn how Global Employment Outsourcing from Safeguard Global can help you achieve your global expansion strategy.