Why Now is the Time to Consider Expanding Your Business Internationally
So, you were planning to expand your business to the U.S. or Canada and then COVID-19 came along...should you still pursue your global business expansion plans despite economic uncertainty?
Realistically, no market has been fully shielded from the pandemic shock waves. However, now may be the time to push ahead with global business expansion plans to take advantage of other markets while many of your competitors may be holding back. Despite the challenges presented, businesses are faced with a choice - innovate and take risks to transform their operations or stay in the same place.
So, why should you consider jumping into global expansion...
Decrease Your Reliance on a Single Market
The COVID-19 pandemic highlighted the issues of over-relying on a single physical market. Expanding internationally could be the difference between life and death for businesses in the future. If you choose to expand internationally you provide your business with the opportunity to access a larger target market and spread your risk rather than relying solely on one area.
A drive for change has been created worldwide. Lockdowns and uncertainty in places like the UK for example, surrounding Brexit trade deals made businesses consider expansion into different markets.
It is worth researching your industry in international markets to evaluate the demand to seize opportunities and be in a greater position for the inevitable bounce back.
Remote Work Tackles Traditional HR Global Expansion Challenges
The rapid deployment of remote workplaces as a result of COVID-19 has resulted in businesses shifting their communication methods online, allowing workers to work from anywhere, at any time.
Velocity Global's State of Global Expansion 2020 report, highlighted the main HR challenges businesses experience when expanding internationally. These included;
Recruiting internationally (26%)
Employee immigration (28%)
Long-distance communication with clients (28%)
Managing different payroll processes (27%)
Finding an international expert consultant in their desired market (28%).
Many of these issues can be easily resolved, especially when businesses operating remotely are relying on virtual communication. Consequently, this has solved the problem of long-distance communication and employee immigration being huge barriers holding businesses back from expanding internationally. Remote work has helped companies realize that they can operate from anywhere in the world due to the prominence of technology.
As of now, there are certain immigration bans, particularly in the U.S., which prevent businesses from relocating workers overseas. With this ban set to lift in November 2021, there are still huge delays in visa processing to physically work overseas from embassy backlogs. However, there are still ways in which you can expand your business internationally without being physically present.
Don't let temporary restrictions prohibit you from growing, using an employer of record service takes the burden of the HR administrative back-office tasks such as payroll and managing overseas workers. Consider using an in-country expert in your desired market to engage local sales workers to get your business established whilst you focus on your growth and daily tasks from your home country.
Favorable Economic and Political Incentives From International Governments
Businesses are evaluating risks now more than ever in the age of COVID-19, particularly economic and political risks. If you are still considering business expansion it is worth exploring how other country’s governments have responded to the pandemic crisis, the business incentives they offer, and their health care accessibility.
In some cases, the assistance they offer businesses to grow may now be greater than pre-COVID-19 times, making it the perfect opportunity to expand. For example, certain U.S. states have been offering attractive relocation incentives to encourage businesses to relocate.
Take Canada for example, it has many favorable economic and political benefits which make it a worthy option for business expansion such as:
One of the worlds most comprehensive trade networks
A publicly funded and one of the most developed health care systems in the world
An educated workforce, providing you with access to top talent
Canada is one of the most politically stable countries in the world, which is especially important in post-COVID-19 times
Canada has trade agreements with more than 40 countries. Canada is also the only G7 county that has free trade agreements with all other G7 countries which provide businesses that operate in Canada with a competitive advantage and access to approximately 1.5 billion customers.
Additionally, Canada has added more than 1 million jobs in June 2020 from May 2020 as businesses start to reopen.
Less Need to Establish a Physical Entity
Travel bans, particularly in the U.S have paused the majority of international travel plans, but this doesn’t mean you have to halt your potential for international growth. Instead, you must change your global expansion method and consider ways you can do business overseas without leaving your domestic location.
Traditionally, businesses would establish an entity overseas but this does have drawbacks. This includes the expense of setting up an international office, employment law risks, cultural differences, and travel restrictions in the form of international crisis’ and visa requirements. By partnering with an employer of record, you don’t have to worry about establishing a local entity.
You can enter an international market and engage foreign talent within a matter of days, eliminating the time consuming and expensive process of setting up an office overseas. Additionally, the ability to exit a market as quickly as you entered by not having an entity is a reassuring option when expanding during uncertain times.
Expand Your Business Internationally With an Employer of Record
If you are considering global expansion, now is the time to make sure you do it correctly with an experienced international expansion partner who knows the market to decrease your business risks and heighten your chances to succeed.
Partnering with PGC helps manage the risks associated with global expansion and provides you access to our 20 years experience of in helping businesses expand from the UK. We will help you navigate the complex legal employment differences in U.S. and Canadian markets, so you can solely focus on growing your business.
Ready to learn more about how PGC can help you expand during and after COVID-19’s economic uncertainty? Get in touch today!