The benefits of setting up a new business overseas
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If you’re thinking about starting your own business, have you ever considered that it may be beneficial to launch it abroad? The world is a smaller place than ever today, thanks largely to technological advancements. That’s why fledgling entrepreneurs like you are broadening their horizons and looking beyond their own borders for business opportunities.
When done properly, launching a start-up overseas can yield heaps of benefits. Whether it’s tax breaks, a different way of living or direct entry into untapped markets, there’s a wealth of reasons why running your own business overseas can work for you.
Exploring the pros of starting a business abroad
- Reduced overheads
Some parts of the world may offer cheaper workspace, wages, as well as day-to-day expenses. - Enhanced work-life balance
Although we don’t recommend picking your start-up’s home based solely on where you want to live, it helps if you can run a successful business in a place with a great quality of life outside of working hours. - Better regulatory environment
Look for certain regions which may have more competitive or relaxed regulatory climates that make starting and growing a business easier. - Tap into emerging economies
Pinpoint target demographics within emerging economies where you can try to dominate with less competition.
Being selective with your location
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Hand-picking the right place to start your business is one of the most important decisions you’ll make. Be sure to get the distinction right between picking somewhere that your business can grow, not just somewhere you’ve always wanted to live.
For anyone seeking a tech-friendly hub, there are one or two strong options. In Singapore, there is a strong tech infrastructure, direct access to Asian markets and low corporation tax rates of 17%. In the Baltics, Estonia can also prove a popular starting point for digital businesses. You can see from this website that it embraces tech entrepreneurs with its e-Residency program.
In Central America, Costa Rica is another that’s fast becoming a hot-spot for entrepreneurs. There is zero capital gains tax, a well-educated, bilingual workforce on tap and a pro-business government with a driven approach to innovation and investment. Some of the industries best suited to life in Costa Rica include fintech companies and cryptocurrency exchanges or blockchain-based start-ups. This article from IteliumLaw on securing a Costa Rica crypto license is relatively easy to obtain, with companies registered on the Costa Rican official register able to offer crypto services without further permits or authorizations.
Tax breaks and incentives to consider
As a start-up, it can also be useful to look at countries which offer tax breaks or further incentives to attract entrepreneurs. In Costa Rica, no capital gains tax is paid, for example. In Estonia and Dubai, there is a 0% corporation tax rate. In Estonia this is on the proviso that profits are reinvested, while PwC states the 0% rate in Dubai is reserved for firms within its free zones.
Of course, running a start-up from the ground up in a country that’s foreign to you won’t be all sunshine and smooth sailing. There’ll be plenty of other hurdles to negotiate. Not least the legal and bureaucratic backdrop of your chosen country. You’ll also need to learn and embrace the local customs and etiquette of how people do business in the region.
Don’t let these challenges put you off. With the right preparation and local support, these issues are easily overcome, unlocking the door to taking your business idea forward where the opportunity is greatest.