The 2020 COVID-19 pandemic has led to major changes in the world’s economy. While there is no accurate estimate on the total damages to the world economy, there is a widespread agreement among world economists that severe negative effects have been felt by almost all the economies around the world. It is predicted that the pandemic will trigger at least a 2.4 to 4.5 per cent loss in gross domestic product loss in most major world economies. This is a result of many businesses shutting down due to the lockdowns implemented by their governments in efforts to lessen the spread of the disease.
However, not all industries will be negatively affected by the pandemic. Companies that belong to healthcare, online communications, and workplace mobility industries are getting more and more customers because of the pandemic. Companies that belong to these three industries are experiencing a growth in their customer base that these companies may consider expanding to international markets to take advantage of the growth in the demand for their products and services.
However, the decision to expand to the international market may encounter different challenges along the way. It is, therefore, best to determine what challenges you may be faced with as you venture into new jurisdictions and cultures. Here are some of the challenges.
Is It the Right Time to Expand Globally? With the ongoing pandemic, the ability to recruit a marketing staff may be limited because of the different pandemic guidelines and regulations placed in different countries. However, with the advancements in smartphone and communications technology, expanding your markets internationally can easily be managed through online ordering and efficient logistics. Nevertheless, it is still important to have some of your company’s people located in the international markets that you want to penetrate.
Is Your Company Mindset Ready for International Markets? When your company decides to expand globally, your entire company should have a mindset that is focused on international expansion. This means that everyone in your company should be on board with the expansion, including the CEO, CFO, and all other stakeholders and staff of your company.
How Do Your Company Can Get Going Quickly? When you plan to expand to the international markets, do not experiment with your international strategy. It is best if you follow the standard protocols in penetrating the international markets. This includes the universal steps such as registering your company to pay any local government taxes in the country that you are expanding to. Likewise, you have to consider hiring locally, such as hiring a local service provider, such as a local accountant. Most countries will require that you employ a specific percentage of your staff from their residents. Furthermore, there are also guidelines about the transfer of IP ownership.
It is best to become familiar and understand all the different policies and regulations that each country has to allow foreign companies from penetrating their markets especially if your company is going to set up a physical office within that country.