Global Business Expansion and Remote Employee Hiring Overseas: Advantages and Disadvantages
Thinking of expanding globally? We consider the possible options.
With the new year underway, businesses are examining their strategies, plans, and objectives for the coming year. With this in mind, we look at possible options for companies looking to manage their expansion globally.
When incorporating an overseas company with a physical presence or employing foreign workers overseas without a physical presence, there are many factors to consider that can be both an advantage and/or disadvantage. It is all a matter of economics, budgets, costs, and making the correct investment decisions.
Read on as we investigate some potential advantages and disadvantages of each option.
Incorporation of a company overseas
- Setting up a company overseas can diversify an organisation’s client base and broaden access to new markets.
- Having an established presence in-country can raise the profile and credibility of the company.
- Depending on the choice of country, favourable tax rates can bring cost savings to a company.
- Business-friendly laws in the country of choice can make the intricacies of the operation of a company easier to navigate.
- Setting up a company overseas can be costly, with complex legal and regulatory risks.
- The process can be time consuming, overwhelming, and stressful for beginners.
- International expansion could mean differing languages, cultural differences, and currency fluctuations to consider.
- You may need in-house specialists and legal teams to mitigate possible risks and support the company.
- Company set-up will require the opening of local bank accounts for the company.
Employing Remote International Workers
- Hiring foreign workers can give businesses access to a larger pool of talented candidates.
- Foreign workers offer a diversified workforce that can be robust and high performing.
- A more cost-effective workforce if employed in countries with lower labour costs.
- Can help avoid a shortage of skilled workers.
- An organisation can gain valuable local knowledge and connections in the country of employment.
- Lower operational costs.
- Cultural and language differences can cause cultural misunderstandings and communication difficulties.
- Legal and regulatory implications and risks associated with employing staff in a foreign country.
- Global compliance issues related to complex employment laws.
- Correct classification of workers.
Here are some examples of countries where you might consider incorporating a company or employing foreign remote staff:
Switzerland: A country with political and financial stability, Switzerland has a transparent legal system and access to the European market with a highly skilled workforce – these aspects make it an attractive option for foreign companies. However, it is also highly regulated with high employment and property costs.
Canada: A lucrative destination with a healthy economic and political climate and skilled labour force. It is a good option for business investors exploring expansion into the United States, although high living standards can be a challenge.
Singapore: Considered politically stable with a business-friendly environment, low taxes, and an ideal location. Challenges include the cost of living, and some language and cultural differences to the US/Europe.
Australia: Australia maintains a strong economy and is considered business friendly. Since the language spoken is English, it is not considered a country with a language barrier. Some considerations are navigating its time zone differences with other countries, and the cost of living.
United States of America: A global power on the world stage, with a large customer base and home to many successful businesses, with potential for a large customer base. Challenges include selecting the appropriate location in the United States and the cost of doing business, as it is a very competitive market.
Company global expansion and hiring remote foreign employees can be very beneficial to a company; however, some risks need consideration, and a company needs to weigh the advantages and disadvantages of both options and understand its target market to ultimately make the correct decisions in achieving its goals.
If you are looking to hire remote foreign workers, Mauve Group has services in place to help you navigate the complexities, legal and compliance requirements in the country of your choice. To enquire about Mauve’s services, contact our team of experts here.
The information provided has been checked for accuracy as of the date of publication, and is intended as a general guide and for information purposes. It is subject to unanticipated and unexpected changes and does not constitute legal advice.