Setting up an agency abroad
Expanding your agency into a new territory offers countless opportunities, however a new country comes with a distinct set of challenges. In order to plan effectively, intricate knowledge of the local business landscape is crucial to ensure your success from the outset. Partnering with a good local firm of expert advisers is key to fully understanding your options and obligations.
Here we outline some key areas to consider:
Geography and Culture
Getting to know the economic, business and cultural environment of the country you are entering is crucial. Cultural differences include whether it is more effective to be relationship or transactional based when doing business. Perhaps obvious but often overlooked practical implications of setting up abroad including time zones and language barriers can have a huge impact.
The structure of your operations could take many different forms (e.g. company, branch, sales office etc). The specific nature of these in the country you are operating will determine your legal status and consequential tax implications. Getting professional advice will ensure your position is as efficient as possible.
The fiscal and accounting implications of your investment should include:
- How your entity will be funded (equity or loan capital)
- How the investment will appear in your accounts
- What your exposure to variances in exchange rate may be
- How exchange rate variances can be mitigated
Tax and other compliance
Different jurisdictions have different tax landscapes and the rates, treaties and implications can vary considerably. As well as taxation other regulations such as trading standards, anti-money laundering, bribery acts, GDPR and privacy laws will also vary country to country.
The ability to hire and develop talent is an operational risk. Seconding a trusted senior employee to maintain strong management of your new team can assist with this process. Ensure the correct visas are obtained and that you understand the residence status for those employees being seconded in both their home and host country.
A good understanding of local regulations including social security, employment tax and pensions, will ensure you know your responsibilities and build all employment costs into your budgets. There may even be some exemptions from these costs depending upon your circumstances.
Intellectual Property (IP)
Protect your IP and understand the territorial differences in the level and means of protection that is required. It is recommended that specialist legal advice be sought for this.
How Moore Kingston Smith can support
Moore Kingston Smith is a member of the Moore Global Network, one of the largest international accounting and consulting groups worldwide, with presence in 112 countries, incorporating over 30,000 professionals. This allows us to help companies take a truly global perspective to their expansion plans. We also work closely with the UK’s Department for International Trade (DIT) to support UK companies looking to expand overseas. Here is some additional guidance provided by DIT:
If you would like to have an initial conversation with us please contact the international team at Moore Kingston Smith.
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