There are a lot of itchy feet out there. Up to 900,000 British SMBs have plans to expand overseas by 2025. The headline attractions are easy to identify: new markets and higher profits. The E.U. is just across the water and is the world’s third-largest economy. Meanwhile, the World Citizenship Report 2022 ranks Singapore as the best place in the world to do business. The world is full of opportunities but the optimum location for you to relocate your business will depend on the nature of your business and the way in which it is going to evolve. Any move is going to be highly disruptive and fraught with potential problems, it’s all too easy to become intoxicated by the possibilities and blind to the difficulties, which is why a detailed feasibility study of costs and returns is crucial. Here then are just a few key considerations to help you with that make-or-break decision.
Transport links
There are a number of factors that will influence your decision about the location but one of them is likely to be cost and ease of transportation. Even if your business is not reliant on the transport of goods and materials, ease of access to an international airport is still going to be important.
Office/storage costs
This is an area where there is an opportunity for huge savings. London is the most expensive city in Europe for prime office property, with an average annual cost of 1492 euros per square metre. In Portugal’s capital, Lisbon, under three hours by plane from London, that cost drops to 300 euros per square metre. Office space in Prague is approximately 90% cheaper than Hong Kong. If you are looking to move your business even further afield, say India, then the potential savings are even greater.
Funding incentives
There’s scarcely a country on the planet that doesn’t want your business, though of course how badly they want it will depend on what you have to offer, but whatever your business, it is important to shop around and find out what incentives are available. One-third of the world’s top start-up cities are in Europe and each country in the E.U. has a different range of incentives. Holland is the number one country in Europe and Central Asia for economic opportunity and offers a reduction in corporate tax for research and development. If you set up your business in France but all of your income is linked to, say, a U.S. address, you will be exempt from all corporation tax. Germany offers direct grants to cover set-up costs and fund research and development, as well as offering loans up to a value of 25 million euros for eligible costs.
Business visas
New Zealand often tops ‘ease of doing business’ indexes by virtue of its impressively easy, one day/one procedure route to setting up a business and its ‘Entrepreneur Work Visa’ allows you to set up a business as the first step to residence. Unlike New Zealand, Hong Kong offers an entrepreneur visa with no minimum capital investment required. The level of investment and the ease of acquisition of a business visa are important factors in determining the location of your overseas business.
New markets
Is your intended location a healthy business environment? Is there a demand for your product or services? Will it be necessary to rebrand in order to cater to cultural differences? What is the competition? Ideally, you are going to relocate to a destination where the competition is non-existent or of poor quality, enabling your business to provide a conspicuously better product.
Access local talent
Another opportunity for considerable savings. For example, 53% of the workforce available in Portugal, between the ages of 20 and 30, are STEM graduates, meaning that you can hire your tech expertise for around a third of what it would cost you in Paris or Berlin. That said it might be wise to maintain a percentage of your original workforce in order to retain the ethos of the company. You also need to be sensitive to cultural differences and working practices, so as not to cause offence or create a bad working relationship with your new workforce. A cultural advisor might seem like a luxury, but they could save you from encountering serious labour problems further down the line.