If you have grown your small business into a position whereby it is ready to move into foreign markets, this is a time for extra care to be taken; mistakes at this level can be very costly and we recommend consulting with an international law firm prior to doing anything.
Here are some common mistakes that entrepreneurs make when they set up businesses in foreign countries.
Limited knowledge of local legislation
A common mistake is to overlook local laws and this could lead to fines or even worse, the dissolution of your company. Take business name registration in Singapore as an example; a search must be done to ensure that name is not already in use. Failure to do this will cost you both time and money, as the application will be rejected with recommendations regarding entity name.
Failure to understand local tax laws and conditions
This can be an easy mistake to make, especially when in a non-English-speaking country such as China or Thailand. In Singapore, for example, you can receive government tax allowances if eligible and many entrepreneurs simply don’t know this. Prior to doing anything, you should consult with an international law firm that handles foreign business registration and they can help you with planning.
Bad financial planning
There are a lot of costs when setting up a business, especially in a foreign land and if you don’t crunch the numbers to find the precise amount for the startup and running expenses, you could end up in financial hot water. We recommend doing an in-depth study of the operation, which gives you accurate data so there will be no nasty surprises further down the road. Click here to learn about top strategies for teambuilding.
Hiring the wrong people
If you are in need of office staff in a foreign country, it is tempting to accept the first applicants, and this is never a good way to hire. The law firm that handles the registration has access to local bookkeeping and accounting staff and you can rest assured that you will receive a professional service from local providers.
Choosing the wrong type of business – Typically, you have 3 choices, one of which is a private limited company that is a trading entity, another is a representative branch that allows you to carry out market research and the final choice would be a partnership. An experienced local business lawyer can fill in the gaps and offer professional advice that minimises your taxes and keeps the business fully compliant.
Moving into a new market in a strange culture is no easy thing to do; talk to the right law firm at the very outset if you are planning to register a business in Singapore, or any other country for that matter. If you have sound legal advice and a good overall plan, your new venture should enjoy sustained growth.