Moving abroad and starting your own business in a foreign country is a daunting task that requires intense research and thorough planning. But all that stress and hard work can turn into one of the most rewarding experiences you’ll ever have. I decided to move to Thailand in 2012 to start my first company: it allowed me to grow my business much faster than I could have in the U.S., and it made me who I am today. If you’re thinking of starting a business abroad, there are some basic things you’ll want to start researching. To make it easier for you, I’ve listed them here, along with a few tips that I’ve picked up over the years.
If you’re thinking of starting a business abroad, there are some basic things you’ll want to start researching. To make it easier for you, I’ve listed them here, along with a few tips that I’ve picked up over the years.
Start With The Legal Stuff
The laws that apply to your business will vary greatly depending on whether you register in the U.S. or another country. Since I was living abroad, and my business is entirely internet-based, I chose to register in a state with no income tax. These states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
I was also able to take advantage of the foreign earned income tax exclusion, which shields your first $100,000 of profit from federal taxation if you live outside the U.S. for more than 330 days in a year. These two tax benefits allowed me to grow my business much faster than I could have while living at home, because I was able to re-invest profits back into my business that otherwise would have gone to Uncle Sam.
If you’re registering your business abroad, there are three main legal aspects you’ll want to pay attention to: taxes, intellectual property rights and political climate. I can’t stress enough the importance of finding an international tax lawyer who has experience dealing with the country you’ve chosen. If you can’t find one, try searching for entrepreneur groups in your desired country, and ask who they’re using.
Another good place to start your search is the Small Business Administration’s list of resources for doing business abroad. For individual tax considerations, the IRS also has a useful FAQ page. As for international IP rights, the easiest way to find information is by going to the World Intellectual Property Organization’s website. Its country profiles page allows you to search for IP laws by country in just a few clicks.
Researching the political climate in your potential country is also an essential part of developing a well-thought-out plan. Simply put, certain countries have less-than-favorable reputations with foreign entrepreneurs. You want to make sure that you won’t be a year or two into business when a litany of new “taxes” pop up.
Investigate The Infrastructure
Once you’ve got all of that exhilarating legal research out of the way, it’s time to consider the country’s infrastructure. How much will rent and utilities cost? What transportation systems are in place? How fast is the internet? How often will the weather affect your ability to do business? Those are just a few of the questions you’ll need to ask.
When researching the infrastructure, be sure to look into the specific cities or regions you might stay in. The country might meet all of your requirements, but that doesn’t mean every part of the country will. Things like internet connectivity, transportation, and climate itself can vary drastically from region to region.
Embrace The Culture
If you want to successfully live — let alone do business — in a new country, you need to embrace the culture and gain at least a functional understanding of the language. Sure, you can get by on translators or spend all of your time with other expats, but frankly, if you’re going to do that, you might as well stay home.
When you interact with locals and speak their language, you open yourself up to a whole new world of experiences and possibilities. From a business standpoint, you’ll find it much easier to forge new relationships if you can communicate effectively. Even if the conversation starts in their native tongue and moves to English, you’ll both show and receive respect by making the effort. Thanks to the internet, phone apps, and more extensive resources like Rosetta Stone, it has never been easier to learn a new language. Pick up one of these resources or find a couple native speakers online to converse with before you go, and you’ll be speaking your desired language in no time.
But don’t forget — learning the language is just one part of embracing a new culture. You’ll also need to learn personal and business customs. Unfortunately, it’s hard to truly grasp all of these customs before you experience them, so my advice would be to throw yourself into it wholeheartedly, and don’t take yourself too seriously. We’re all going to make a couple of silly mistakes when adjusting to new surroundings.
Like I said at the beginning, the choice to move to a new country and set up shop is a daunting one. But with thorough research and planning, it can be the most rewarding decision you’ll ever make. If I could leave you with one last crucial piece of advice, it would be to find a partner: someone who’s native to the country (or has lived and done business there) to be your right hand. Their firsthand experience will prevent you from making simple mistakes due to inexperience, and it will make things much easier for you from the start while you’re still adjusting. And remember, there’s no such thing as doing too much research.