Europe offers a tremendous opportunity to those looking to expand outside of US borders into new markets. Half a billion potential customers live in European Union member countries. Even with the impending exit of the United Kingdom, this continental integrated market can help an expanding American business find new markets and expand profits.
While the expanding US economy does have more opportunity for growth than at any time in this century, international business expansion helps companies to diversify their markets and develop a more solid footing.
unlike expanding into another state, setting down business roots in another
country means dealing with a different regulatory, tax, and social environment.
Make sure to do research on what needs done before trying to expand.
Taxation and Regulatory Issues
While company owners can research all of this online, they should reach out to development organizations and business promotion agencies. Each country has its own development office, just as many US states do. Development offices exist to attract and facilitate foreign investment. Larger countries may have regional and even local development authorities. Many countries also have chambers of commerce that can help to answer questions and alert US company owners to potential obstacles.
Risks and Challenges When Expanding Abroad
The National Center for the Middle Market lists tips for businesses planning on expanding abroad that illuminate risks and challenges, but also opportunities. These include:
Consider the market. What is the current or potential demand for
your product or service?
Examine the numbers carefully. Some economies may have a positive
indicator, but does it truly refer to robust growth?
Consider local tastes. How much should you try to conform to them
while offering something different enough to intrigue potential customers?
Should you have a local partner?
Consider issues such as intellectual property laws (some countries
do not recognize this), level of corruption, and exchange rate issues.
Assistance Is Available at Export.gov
Companies expanding internationally can get some help from the federal government. Consider looking at the Export.gov site run by the United States Export Assistance Agency under the Department of Commerce. It administers small business centered programs every year that, for a relatively low cost (that itself is subsidized by West Virginia and other states), conduct “speed dating” style events in target countries. While they target a different region around the world each year, the US Export Assistance Agency does conduct these events in Europe from time to time.
The US Export Assistance Agency also has officials covering different regions of each state to answer questions and to help businesses expand abroad.
While the US Export Assistance agency can be helpful, experts still recommend that companies expanding internationally retain the services of a firm that will advocate for them specifically.
Opportunities Abound in Ireland
For the last several years, Ireland has been one of the leading EU countries in terms of attracting investment, especially from the United States. As of four years ago, over 1,000 multinational companies chose to enter the EU market through Ireland. The number has only increased since then. Several characteristics of its economy and development policy show that there is real advantage to investing in Ireland.
Ireland structured its tax and regulatory system to become one of the most business friendly countries in Europe. Its corporate tax of 12.5 percent alone led to strong success in attracting US investment and helped inspire congressional tax reformers. Ireland also offers a 25 percent research and development tax credit.
The country also has attractive human capital numbers with a low median population age of 35, which is the lowest in Europe. The workforce also has a higher ratio of college education and trade related skills than the US or the rest of Europe.
For both low taxes and also a flexible, educated workforce, a company looking to expand in Europe should consider the advantage of investing in Ireland.
Now Is a Great Time to Expand
With the economies of both the United States and Europe growing, now is a great time to explore business expansion. If a company does its homework, taps the right informational resources, and works hard, the European market should represent a huge opportunity for growth for businesses determined to expand internationally.