Will you allow One IBC to send you notifications?

We will only notify the newest and revelant news to you.

What to consider when expanding a business internationally

Updated time: 02 Jun, 2022, 15:46 (UTC+08:00)

Aiming at expanding into foreign markets.

Aiming at expanding into foreign markets.

It is common in a modern world to see a variety of companies expand their business into foreign markets. Expanding into foreign markets is a multi-factored way that is often executed over time. In order to grow their economies, governments sometimes offer incentives to corporations to enter their markets. Besides capturing market share and revenue growth, many companies have already expanded their business into foreign markets and found that things are much more than that. A survey conducted by Argyle Advisory and Globalization Partners showed that capturing market share and sales growth are the two major reasons that most business owners desired, which made up 49.7% and 44.8% respectively. Whereas diversifying investments accounted for 30.9%, the ability to acquire top talent accounted for 29.1%, and the reduction of costs was 29.1%. As a result, many businesses are taking advantage of expanding into foreign markets to grow their business even stronger and more sustained.

Depending on their long-term strategies, businesses are not having the same reason for expanding into foreign markets. For instance, one might strive to seek new challenges, another might see golden opportunities in new markets. Nevertheless, it brings abundant benefits to the business. Therefore, here are the top four factors that business owners should consider when expanding their business into foreign markets.

1. Why do companies expand into foreign markets?

First and foremost, revenue. Businesses often expand into foreign markets when their growth strategies and tactics applied in the local market are limited and used up, which requires them to seek international opportunities. Increasing the product distribution to other nations leads to increasing the customer base. Hence, the key for revenue growth is utilizing concise and attractive marketing strategies to establish a strong relationship with these international customers.

Secondly, companies expand into foreign markets with the purpose of diversifying their supply chain, especially overcoming disruptions during the pandemic. Many businesses faced the supply chain shock at that time, which exposed vulnerabilities in the production strategies. Based on the survey conducted by the Institute of Supply Management in April 2020, up to 95% of US businesses reported supply chain interruptions as a result of the COVID-19 pandemic. Similarly, in China, the average time for goods to be delivered has increased by 222%. Meanwhile, Korea was close behind with 217%. Thus, diversifying the pool provides resilience in the event of a comparable global shock since businesses can no longer rely on a small group of suppliers. Some manufacturing corporations have regional and worldwide supply networks based in Singapore. To create supply chain resilience, these companies use Singapore's worldwide network of logistics giants. At the same time, they may provide faster fulfillment and response times to regional consumers.

Last but not least, foreign market expansion enhances businesses’ brand presence and grows their footprint. The easiest way to do that is social media. Take MINISO for example, the company was established in 2009 and had over 4,587 locations globally within 1 year. It was able to overcome cultural barriers and attract value-conscious clients in over 70 countries by focusing on low-cost aesthetic things. Nevertheless, MINISO's key problem was to target a market that was spread across several nations. MINISO was able to improve social media involvement by 300% and enhance online and offline sales in the middle of a pandemic by working with brand ambassadors who are well-known in their target areas. As a result, expanding into foreign markets as well as building an international brand presence may also be a strategic benefit for their companies, which allows them to reduce their reliance on local markets while improving their overall market position.

2. Advantages and disadvantages of expanding a business internationally

Advantages of expanding a business internationally

Lowered Operational Costs:

Establishing businesses in a different nation might actually cut down the operating costs. In fact, some nations may provide lower rent, utilities, and even financial duties to employees. India, China, and the Philippines, for example, all have lower business operational costs. Similarly, it might be lower in paying salary to hire the local employees compared to the salary of employees in the home country, which allows taking advantage of the local market without having to pay a higher price. Essentially, businesses with a concise and clear business plan have enjoyed the new opportunities and incentives as well as lower business operational costs.

Access to international talent

A huge advantage when expanding a business internationally is accessing international talent. It may assist in remaining relevant in a market, being compliant with rules, and maintaining excellent cultural practices and improving the reputation of the organization. A larger talent pool offers a greater variety of abilities to draw from. The internationally diverse workforce will be more equipped to handle the day-to-day business relationships that come with an organization. Moreover, organizations with more international workers are 1.7 times more likely to be market leaders in terms of innovation, implying a greater possibility of operational success and continuing expansion.

Foreign investment opportunities

Organizations thinking about expanding internationally should evaluate the additional investment opportunities that overseas markets might provide. Operating in global marketplaces, for example, allows many companies to create new resources and form-critical contacts. Furthermore, multinational corporations can also take advantage of profitable investment possibilities that may not be available in their native country. Many governments throughout the world, for example, provide incentives to corporations wishing to invest in their area. As a result, before deciding to expand internationally, businesses should constantly conduct research.

Advantages and disadvantages of expanding a business internationally.

Advantages and disadvantages of expanding a business internationally.

Disadvantages of expanding a business internationally

Managing Overseas Employees

Managing employees overseas in another country is difficult. It necessitates a fresh perspective on HR and legal processes, as well as a thorough awareness of local employment laws. Time zones and communication difficulties might make it much more challenging. However, businesses may work with a professional HR agency to get the type of help and individualized personnel management services. They can serve as a link between the two countries, facilitating communication and improving working procedures.

An increase in capital requirements

A larger company needs a larger labor, more buildings or equipment, and, in many cases, more capital. Thus, it requires sufficient planning and preparation before expanding a business internationally.

3. What to consider when expanding a business internationally?

Definitely, there are thousands of questions in mind when it comes to expanding a business internationally, thus, it is extremely important to carefully consider the following factors before jumping into a new market.


Business owners should become familiar with the local culture right away. In order to successfully expand a business internationally, it must be consumer-focused in every element, including the local language. The most critical aspect of giving the customers a local experience is language. It is necessary to allow customers to choose their favorite language on the website. When customers can explore business websites in their own language, they feel more at ease, and the business appears to be a trustworthy and reliable business. It can also help to reduce customer service concerns by allowing local consumers to get answers to their questions in their own language. Hence, it would result in fewer customer service difficulties, which means fewer unjustified chargebacks.


Currency is the next consideration that plays an important role in expanding a business internationally. Businesses should have a clear preparation in the local currency and which currency local consumers prefer to pay in. There are various smart technologies that can help customers have a more seamless experience. Therefore, business owners may change their checkout process to automatically default to the proper currency based on the customer's location, or they can give currency converters that show the total cost.

Payment methods

It is crucial for businesses to take banking and payment methods into consideration. Most businesses provide famous credit cards such as Visa, MasterCard, and American Express as payment methods on their website which is really convenient. However, the purchasing behavior of customers is different from one country to another. For example, some customers may want to pay using PayPal or another digital wallet that is popular in their country. Thus, their preferences must be considered and handled.

Looking for opportunities when expanding a business internationally.

Looking for opportunities when expanding a business internationally.


Before jumping into a new market, businesses must have a deep understanding of the laws and regulations of the preferred country, as well ensure that their businesses can comply with them. Some of the important laws and regulations that businesses might need to consider when expanding a business internationally are:

  • Import and export
  • Product standards and regulations
  • Local taxes
  • Intellectual Property
  • Trade restrictions
  • Disputes and chargebacks

Brand recognition

When it comes to expanding a business internationally, it is possible that businesses will have to venture into areas where their brand is not recognized. Raising brand awareness involves putting money into advertising and fostering positive sentiments that will encourage people to trust a newcomer. Be cautious about the local culture and language, as it may cause big troubles. For example, in Spanish, the Ford NOVA means "no go," which does not augur well for automobile sales.

4. Best countries to expand your business internationally

Singapore - an ideal alternative for you to expand business internationally due to its political stability, a booming economy, a skilled workforce, and many more. It currently has a $313 billion GDP with a 2% yearly growth rate.

See more: Singapore offshore company formation

Switzerland - one of Europe's top countries for expanding your business internationally. The country's GDP is $679 billion and is growing at a rate of 1.4% per year. It deserves to be at the top of every ranking since it has a skilled workforce and an unemployment rate of only 3.3%.

See more: Swiss offshore company formation

Hong Kong - with its large financial industry and entrepreneurial environment, Hong Kong has been listed as the third most expensive city for businesses by Business Insider. Immigration rules are tightened on a regular basis, as they are in every high-demand location, but it is still open for business.

See more: Hong Kong offshore company formation

Netherlands - Having risen two positions from last year's list has proved the welcoming business environment in the Netherlands to global investors. Also, the forward-thinking government passed the EU Intra-Company Transfer Directive, which has the potential to help European businesses significantly.

See more: Company formation in Netherlands

UAE - Entrepreneurs from all walks of life will find intriguing prospects in the UAE. It offers a slew of start-up-friendly activities as well as financial incentives to promote diversity and equal-opportunity entrepreneurship. Other benefits include five-year visa extensions for elderly professionals, 100% foreign ownership of businesses, and even ten-year visas for select companies and property owners. Dubai has also created a new residency option that allows expatriates working remotely to move to the emirate with their families and live there while continuing to work remotely for their offshore company.

See more: Offshore company formation in Dubai, RAK, UAE


Latest news & insights from around the world brought to you by One IBC's experts

What the media say about us

About Us

We are always proud of being an experienced Financial and Corporate Services provider in the international market. We provide the best and most competitive value to you as valued customers to transform your goals into a solution with a clear action plan. Our Solution, Your Success.