Europe has always been considered a great place for companies that are looking to expand internationally. With a population of over 700 million, a common market, a diverse zone of countries and various cultures. Europe gives foreigners from outside the EU plenty of opportunities to set-up a business here.
However, expanding into Europe comes with its own challenges. One of the most important things that everyones should keep in mind is that each European country has its own unique rules and laws regarding other countries from outside the EU who want to set up a business.
In this article, we will look at the obstacles, benefits and some tips to look out for:
1. Do some research, it will help you to avoid the potential pitfalls that you might face
Research is so vital and crucial. Before expanding your business, research is a must thing to do, because you need to do market research, in order to know what you will be facing. Whenever you are considering expanding your business, the first step that you should take is to do some research for the country or continent which you are thinking of expanding to. It’s important to know how and where you’d be able to navigate local regulations, laws & tax codes and regulations. The national regulations about business registration, which are different for each country. You will need to summarize and understand the pros and cons of the European market & how it works.
After you researched the wanted region, you should watch out for: Pitfalls / Obstacles
2. The cost it takes to set-up the Business
Besides the time it takes, expanding into a new market can be very expensive. Paying local workers, building the infrastructure, setting up the entity or shutting it down can cost a lot. However, it all depends on each country’s government and the way they operate. In addition, there are ongoing costs required to keep running the business successfully. If the business fails or does not work out, you may want to shut the operation of the business down. For instance, in some countries the shutdown operations can be very expensive and take a long time.
3. Compliance Risk
To work compliantly and legally, the business will need to partner with the right people that will help the company to remain compliant, which means you will have to hire compliance consultants, lawyers and local tax accountants to make sure the correct business procedures are in place.
For successful global expansion in Europe, adapting and operating accordingly to the
country’s regulation is a must!
4. Cultural Differences – Think global, act local
Whenever you are planning to set-up or expand your business to another country you should carefully watch out for the cultural differences, and how to deal with them. We’re fully aware that cultural misunderstandings are closely aligned with marketing issues. In order to avoid these misunderstandings, mutual understanding of each other’s culture is a must for successful expansion.
Benefits of expanding your business
Before expanding your business to Europe, you must know the benefits, and here we are listing some of them:
1. A first mover advantage is beneficial in establishing your business in Europe
When it comes to first-mover advantage, South-Eastern Europe (SEE)’ is increasingly popular. South-Eastern Europe (SEE) comprises the Balkans. The first-mover advantage gives you the ability to be better by being the first one to reach a new market with a new product or service. Although that advantage does not last forever it will help you to strongly increase your sales and dominate with your product in the market for many years.
2. Getting access to European talent
When you expand or move your business in Europe, you will need & want to hire the best and ambitious workforce across the Continent. While you are considering bringing members of your team over to be part of your EU expansion, why not recruit and select them from the much talented European workforce. It will help you a lot in avoiding and reducing traveling costs for the worker, accommodation costs etc.
There are a lot of multilingual companies that offer marketing services, along with digital marketing as well. Techniques that work in one market may seem not to work in another market or some things that may seem good to do in marketing can be offensive in another culture which can truly penalize you in the international markets.
3. No language barriers
Almost everyone in Europe speaks English and many of the population are multilingual. You will find no language barriers in the EU. You also will find the skilled and talented workforce that will help and make it easier to meet your business demands.
4. Brand Recognition
While expanding to Europe, you are contributing to your brand recognition, where a wide range of audience can become very familiar with your brand. Also, it is important for companies to approach the cultural difference in the best perspective rather than let it easily backfire because it can. International business marketing issues are closely aligned with language and cultural barriers.
Investing time in planning and research is likely to make it easier for you to create a bright concept of what expanding to the EU would look like, what is that country’s attitude towards rules and a lot more.
As we mentioned before the requirements of setting-up your own business in any EU country, vary depending on the wanted country. However, the EU encourages all countries to meet certain targets for helping to set up their companies.
Following these tips and a lot of EU rules & information that you can find in relevant EU websites, should facilitate your expansion in the EU.