Why do we need a foreign company?
To be brief, a foreign company is needed to develop its own business and itself. Why is it still important to have your own foreign company? The detailed answer is below.
The domestic market of a single country seems great for novice entrepreneurs. But, over time, you begin to understand that it is not large enough, because There is always a competitive race that this market reduces for potential growth. For those business owners who seek to grow their projects, foreign markets represent huge opportunities. The desire for international growth, by entering the world market as an exporter or importer of certain goods or services, provides many opportunities.
Here are the most obvious benefits of external business expansion:
you can extend the life of your existing products and services by finding new markets for their sale,
you can reduce your dependence on markets that you have already developed in Russia,
if your business suffers from destabilizing fluctuations in your market due to seasonal changes in demand cycles, then you may be able to align your sales by choosing markets with different, or even anti-cyclical fluctuations,
you can use your corporate technology and the know-how of your products to conquer foreign markets and make more profit,
entering the foreign competitive market, you will find out what are the methods of successful competition in your particular segment, as You will have to enter battle with local companies in their territory. This strongly stimulates the development of our own unique competitive advantages,
You will be able to insure currency risks associated with the loss of the value of your funds in case some of them are in foreign currency in foreign bank accounts. It is advisable not in one country and not in one currency, but in several. For example, if your funds are distributed evenly between GBP, Euro and USD, then they will not face the problem of devaluation of the ruble,
you can attract the best world experts to participate in your project with sufficient funding,
you can attract cheaper and larger credit and investment resources due to the fact that the rates there are lower, and the investment market is much more developed and legally protected,
and of course, the main reason to go global is to increase the internal potential of your business project for the growth of all parameters.
As you can see, these are only the most obvious of the international opportunities that open up with access to foreign markets. To list them all and at least paint a little, you have to write a whole book.
And if, this is also done in the context of individual regions or countries, then it may turn out to be a multi-volume work. If you take such individual countries as the USA, Canada or Japan, then for each of them you can find a lot of individual markets and advantages that could be used in the expansion of a particular product or service from Russia.
It will be easier if you just look around the globe, you will surely be able to find the opportunity to produce something in Russia and export it to one or another country in the world. Of course, in order to find the right opportunity, you need to know more and work. We offer information in the field of building corporate structures that will help you design your international activities.
How to choose a country or region for expansion?
To do this, you need to decide on the answers to the following questions:
Who will be potential buyers of your products and services?
Which countries have the highest concentration of your target audience?
What is the taxation in a country with optimal opportunities for sales growth of your product or service?
Where are the best specialists in the development of your product and its production concentrated? What are the mandatory conditions for hiring local staff from the state? What tax losses will you expect in connection with the hiring of foreign staff?
What are the conditions for registering a company or branch in the country where your market has the greatest potential for growth?
Is it possible to open a foreign account to a branch of a Russian company in this country? The question is completely far-fetched, because many large foreign banks do not work with Russian companies, their branches and beneficiaries from Russia, for fear of sanctions from the US Federal Reserve, which is their controller.
Especially if your Russian company is little known abroad or it is a startup. Another thing if you are a foreign company. In this case, you will have much less questions. They will not even particularly look at the beneficiaries from Russia.