We are currently seeing an increasing number of UK businesses trading internationally, whether this be within the EU or globally.
Online trading and the use of online marketplaces, such as Amazon, have made it even easier for businesses to reach potential customers, many of whom they would not have considered to be within their target market just a few years ago.
Initially, trading abroad may be by way of exporting, using a local agent or distributor. Once the local market is understood, businesses may then seek to set up or expand their business operations overseas.
Setting up overseas could be by way of buying an existing business, entering into a joint venture arrangement with a local partner, or often it is by setting up a branch or an overseas subsidiary.
Brexit has led many businesses to reconsider their strategy for trading internationally, as highlighted in a recent survey.
64% of IoD surveyed currently export to the EU whilst 51% import from the EU. Of these, two-thirds of businesses that export to the EU were looking to relocate or set up operations overseas. Whilst , overall, the survey found that nearly a third of their members had now either commenced setting up abroad or were actively considering doing so as a consequence of Brexit.
The benefits of setting up an overseas business can include:
In our experience, in addition to understanding the cultural differences, language and political stability of the overseas country, to successfully expand and set up a business operation abroad there are a number of key areas that require due consideration.