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Why you need a BASE before you expand abroad

10 February 2022

Some businesses put their international expansion plans on hold following the onset of the pandemic, but third-party service providers can help you grasp the opportunity to find new sources of revenue.

Expanding into international markets can be a daunting prospect for many businesses, whether large or small, but a new office abroad can help businesses access new sources of revenue. So, despite potential barriers and risks around international expansion, many firms are now deciding to enter new markets. 

As we emerge from the pandemic, firms are reviving their expansion plans and are preparing to make moves, according to the speakers in our latest Single Source podcast.

Firms are typically looking for regulatory stability, strong demand for their services, and a stable political and economic backdrop. Nonetheless, however attractive the business environment, firms need to prepare for what is likely to be a very different business and operating environment before taking the plunge. There are considerable challenges to overcome, such as taxation, regulation, and HR issues.

“Once the decision has been made to relocate [or] expand the business operations to Europe, that's when they face some challenges because they’re operating in a totally different legal and tax environment to what they're used to,” says Michiel Schul, Partner – International Tax Services at Netherlands-headquartered law firm Loyens & Loeff. “There are also differences in employment law when it comes to the hiring and firing of employees.”

It is not just tax or legal differences that matter in the current climate. As new variants of Covid-19 emerge, countries enact different measures to control the spread. And, with more staff working from home, international companies need to understand the rules in the different jurisdictions that their employees are operating from.

"If you’re working in somewhere like France or Germany, it’s likely that French and German law will apply to you as an employee as opposed to Irish law, even though you may be working for an Irish company,” says Pat English, Partner – International Business Group at Irish law firm Matheson. “These are the complications that are inevitably going to come up.”

Advice beats information

In recent years, when firms have established themselves in new markets and jurisdictions, they have often opted to put their own senior teams in place. This has reduced the pool of local talent and put a greater premium on experienced staff, adding to recruitment costs for businesses.

This is where global third-party service providers can help. They often have local offices and, therefore, experience of operating in these markets, making them able to offer companies practical advice.

“There’s never been more focus on the idea that what clients want is advice rather than information,” says English. “There’s a real role for anybody who can testify to the way operations work in various jurisdictions, and that's where you add value as an adviser.”

The biggest enemy

One of the key considerations for businesses looking to expand abroad has always been timing, says English. Timing has become even more critical during the pandemic, as there has been greater uncertainty surrounding the business outlook.

“Uncertainty is the biggest enemy,” he says. “Uncertainty is pervading every fibre of our being in the current climate, with all the related challenges that it brings.”

However, businesses are coming to realise that they cannot put their expansion plans on hold forever, and those that understand the risks could stand to benefit. That is where Apex Group can help.

Introducing BASE

Our turnkey solution Business Acceleration Services (“BASE”) leverages our global presence and experience as a leading professional services provider. BASE supports businesses by enabling fast and efficient international expansion. It can help CFOs and CEOs simplify operations, control costs and provides a single point of contact to streamline your growth.

“Advice is one thing, but when it comes to implementation, you want to make sure it's done in the right way, so that ultimately – in one- or two-years’ time – everything still works in the same way,” says Michiel van der Maat, Head of Corporate Solutions Netherlands at Apex Group. “And then you can start building from there and bringing that client to the next level.”

Our BASE team can assist you through the set-up of your new local operations, look after the ongoing management of the entity, and is available to provide ad hoc support as you scale-up.

You can listen to the Single Source podcast episode here.

To find out more about BASE, and how we can help you expand to new markets, contact our team.

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