Small and medium-sized enterprises (SMEs) are the lifeblood of the global economy.
According to the World Trade Organisation SMEs represent more than 90% of the business population.
In Europe’s largest countries, they account for 35% of intra and extra EU export and by the year 2024, Europe’s SME’s are predicted to be generating 47% of their revenue overseas.
Despite the high success rate in global expansion plans and promising revenue potential from overseas operations, many leaders of SMEs are slow to take a global approach to their business.
Mauve Group are Business All-Star Accredited Global Expansion Experts and the award-winning company is an official partner of the 6th annual All-Ireland Business Summit.
Ahead of the Summit, they’ve offered five ways that global expansion services such as theirs can help SMEs to reach their potential.
According to The Mauve Group, the top five fears that prevent SMEs from expanding into new markets are:
1. Relocating staff to a new market
2. Employing staff compliantly
3. Paying global staff
4. Language & cultural barriers
5. Entity set up
1. Relocation of staff
The immigration process for staff and their families can be a headache.
When deciding on the visa, there are many things to consider such as the workers’ job role, the length of the assignment, location of work, what the requirements are for residency, and if there is a need for multiple re-entries.
Bear in mind that even short term assignments or training visits may require these permits.
Businesses can get workers into their chosen country quickly, legally and efficiently by choosing a Global Visa and Immigration solution.
A dedicated expert will provide your company with expert knowledge on immigration rules and regulations and assist you throughout the immigration process.
2. How to hire staff compliantly
Each country has their own set of rules and regulations, with some even mandating certain employee benefits such as 13th and 14th salaries which are mandatory benefits that must be paid out to the employee.
Its good practice to research what mandatory benefits exist in the country where you will be employing or seek advice from a global employment expert.
Independent Contractors are a great alternative to committing to permanent staff for short-term projects that can also save you money.
But businesses should be aware that the misclassifying of employees as independent contractors is a form of non-compliance that could result in serious fines and penalties.
An Employer of Record or Agent of Record could enable SMEs to hire staff internationally to test out overseas markets without the need to set up an entity in that location.
Global hiring solutions, such as Employer or Agent of Record, can be used for both short-term/project-based and long-term contracts.
3: Paying global staff
A global payroll solution can guarantee timely compliant fund remittance across networks.
The solution isn’t just for larger companies – global payroll providers can take on responsibility for an entire workforce, or simply one or two staff members across as many locations as you need.
And if your business doesn’t have a local presence in-country, global employment providers can help you register your company for payroll purposes in your chosen location.
And they can then provide you with the Global Payroll service and pay the correct tax and social security payments to the authorities on time.
Global FX partners can reduce transfer fees and bank charges by up to 65%, saving your business time and money and something your business should look out for when choosing a partner.
4: Language & cultural barriers
When planning your global strategy, it’s really worth checking out what value-added services are on offer, as these can make all the differences to your local global operations running smoothly.
It’s worth remembering that a company’s culture and a country’s culture differ.
To be successful when setting up in a new location your company must acclimatise to local business practices, and on the ground relationships.
Global mobility experts can utilise their global network of accredited partners to provide SMEs with invaluable tools such as language and cultural training to avoid alienating potential new clients.
Help your teams to assimilate into their personal and professional surroundings, learn local customs and practices and build relationships across multicultural teams, by engaging in the cultural awareness programme.
Any company looking to expand into a new market should really consider translating their written output to local languages and context to avoid alienating potential new customers.
Choose the services that are right for your individual needs and listen to recommendations on the best packages from trusted experts.
5. How to set up the right entity
It’s important to research the best country locations and decide the right type of entity for your business based on your unique priorities.
If you want to set up a physical entity, there are numerous types including LLCs LTDs PLC, joint ventures registered offices for tax branches and subsidiaries and the timescales for your overseas setup will vary as well, depending on the location and route you choose to take.
Global expansion experts use their local partner network to offer support with all aspects of entity set-up, including insurances, immigration, registrations, accounting, HR and more to provide a fully compliant solution.
Since Brexit and the onset of the pandemic, demand for Mauve’s global expansion and mobility services have increased by an average of 59% as companies look for opportunities for global expansion and continuation of operations even in the face of perceived challenges.
In conclusion: Global expansion is not without its pitfalls but with the right advice, SMEs can take the next step in their business and reach their full potential.
To learn more about how Mauve group can help you expand your business, meet their people at the All-Ireland Business Summit on May 18th at Croke Park.