The Indian business industry is one of the largest in the world. With huge economies of scale, skilled labour, and abundant resources, the business industry is on the rise. India has plenty of innovative and clever minds that run the entire business show. Many have successfully expanded their businesses to other countries to capture the international market.
As opposed to older days when businesspersons had to cross oceans to reach international markets while battling storms and illnesses, international business today is much easier. There are fewer risks involved, and sometimes, it is easier than setting up business in your home country! However, the international market comes with its unique challenges.
The opportunities are plenty, both for small businesses and entrepreneurs. As long as the business idea is unique and distinctive from the local population, it will succeed. Considering that this is the ideology of every business in the current century, it works in the international market.
If you are looking for the simplest steps to relocating to another country and starting a business overseas, look no further. This guide will tell you how to start a business in India, which can be easier than you possibly imagine.
Things to consider
1. Political climate and property rights
While some countries welcome foreign businesses with open arms, others are not very fond of it. Confiscations of property owned by foreign businesses are usually very common in some countries. Alternatively, some countries have impeccable property rights for international business owners. It would be best if you considered these countries for the expansion of your business.
Your first job to start a business from home is finding a jurisdiction with minimum political risks. The index for international property rights has all the relevant information you need to get a sense of direction for your business expansion.
2. Cultural differences
A difference in the culture of your target country and your product or service can determine the business success. Your business must add value and meet the desires of the local market in order to succeed in the foreign market. Therefore, having ample knowledge about your target community is essential. Things like what the local market values and their community living determines whether your business will survive or not.
This step will come under market research. You need to understand how to conduct business among the locals of the target country. Keep in mind that these differences will be based mainly on cultural differences and would be very different from your home country.
3. Legal and regulatory barriers
Understanding the legal barriers of conducting business overseas is essential for your business expansion success. There is only one way to achieve business success in an international market: flexibility. Your business should be able to adapt to the local laws and regulatory guidelines set by the government in your target country.
Speaking to a legal counsel from the target country is a good step to get started. Although it may cost a bit much, it is absolutely useful! Save yourself from hefty penalties in a foreign country by understanding the barriers to conducting business.
4. Foreign government consideration
It is important to know how stable the local government is before getting into the overseas business. Consider the following aspects before taking the leap:
- Trends of the currency exchange rates
- Availability and sourcing of materials and resources
- Available options for transportation and communication
- Government-run programs for assisting international businesses
- Local policies that protect businesses – both local and international
- Laws of employment and immigration
The stability of the government is an important factor that determines the success of conducting business. Asking the local experts about the political and business environment plays an important role in successful overseas business expansion.
5. Economic stability
Countries that show an upward trend of economic growth are excellent prospects for international business success. Look for countries that have a low debt-to-GDP ratio and low unemployment. Moreover, if the unemployment rate shows a declining trend, it is a go-ahead sign for your business.
Additionally, countries that have strong consumer spending are great for business expansion. More prospects include low inflation rates, growth of the middle class and rising incomes. On the other hand, it is possible to successfully expand into a country with a stagnant economy. However, it can be a continuous uphill battle towards success.
Understanding the industry
You do not have to be an expert in the industry you wish to enter, but you must know enough to understand what you are getting into. To further get in-depth knowledge of the international market, you will need the help of a local.
A manager from the local market will be an added expense, but it will help you navigate important business decisions. The local you hire must be trustworthy with enough experience and contacts in the local market. The combination of these qualities is enough for your overseas business success.
1. Market research
The first thing to analyse when conducting market research is understanding the spending habits of the locals. After that, analyse the time, energy and capital you would need to dedicate to marketing your business. These steps of the market research will give you a feasibility report of your overseas business expansion.
At this stage, you do not need to worry about the salaries, costs of running the business or the work habits. This will come at a later stage when you finally set up an office or start conducting business with your associates.
2. Language barriers
The language barrier is a great obstacle for Indians conducting foreign business anywhere in the world. However, if the nature of business targets foreign nationals, it will not be an issue. Although at the time of business launch in the foreign country, being able to speak in the local language will prove to be a great advantage. It will be straightforward and easy to launch a business venture in a new country.
Being fluent in the language of the target business country certainly has its benefits. You can circumvent the additional costs of hiring a translator. Getting translation services through an agency usually adds very high costs of doing international business. However, you will need to hire a bilingual employee who can help you decipher legal documents. Legal documents of foreign countries are typically written in the national language. Even if you speak the local language, some words or phrases will need explanation, and your bilingual employee will do that for you.
3. Incorporation process
Thanks to the World Bank and International Finance Corporation, individuals who want to start a business from home can use a great resource. The resource comes in the form of an informative page that compares related costs, time frames, and the number of procedures for conducting business in 183 countries.
This resource has helped millions of people around the world to start a business overseas successfully. It is ideal for businesses with employees between 10 to 50 individuals. However, it is a useful tool that can help small and large businesses. A few examples on this page include:
- New Zealand allows you to form a business within a day with minimum paperwork. Similarly, you need only two days to start a business in Australia.
- Chile and Panama have extended set of rules and regulations. Setting up a business in these two regions involves six to seven detailed steps, which take about two weeks to complete.
- Portugal requires five procedures that take five days to set up a foreign business in the country. However, the country’s economic instability does not show promise for foreign business success.
- Hong Kong and Singapore have great business prospects, and you can expand your business in as little as three days. Although the set of the procedure is only three steps, it comes with high start-up costs. This is the reason why big businesses expand to these two countries easily, as they can bear the high costs.
Although expanding into foreign markets has proven to be beneficial for many, it can also be quite challenging. The entire process of entering into unknown territories can become easier by carefully choosing the right market and jurisdiction.
Expansion or starting a new business outside India requires due diligence. However, it is possible to get there with as little as $1000. Some countries only require $100 for legal registration and license for conducting business.
Entering foreign lands for conducting business is like walking blindly into uncharted territories. However, once you overcome the challenges, the profits are great and international exposure is only business growth. Effective market research is most important, with many challenges to overcome for business success.
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