Key considerations when expanding your business into Asia
As the world begins to open up again, expansion is near the top of the agenda for many companies. Many have set their sights on Asia, home to over 4.5 billion people and boasting one of the world’s more business-friendly environments. But before you rush in there are a few things you need to be aware of….
As 2022 unfolds, now may be the right time to consider expanding internationally, especially as it offers business owners a number of benefits. These include new revenue potential, more customers, greater access to talent and diversifying markets and enhancing your security and stability.
Many companies looking to expand globally have Asia as their preferred business expansion destination. No wonder.
Asia: A business-friendly environment
In the last 60 years, Asia has experienced spectacular economic growth and has become a breeding ground for fast-moving, innovative, and competitive businesses. Since 1960, Asia has become richer faster than any other region of the world.
Of course, this growth has not occurred at the same pace all over the continent. The eastern half of the continent and more specifically China, Hong Kong, Indonesia, South Korea, Malaysia, Singapore, Taiwan, Thailand, and Vietnam have been champions in economic growth. Countries such as Cambodia, Myanmar and Laos are also now emerging as exciting growth opportunities in the near term.
More importantly, the entire region has a very business-friendly environment, especially for foreign investors.
Singapore, for instance, offers low taxes for companies, and has an easy setup for new businesses. It’s been consistently been recognised among the world’s best places to do business and remains among the top choices for business investors.
Market expansion services in Asia
But there are also a number of factors that your business planning needs to take into account if you are to make your expansion project run as smoothly as possible. That’s why many companies choose to partner with a market expansion services specialist organisation in Asia for assistance and guidance for everything from sourcing, market insights, marketing and sales to distribution and logistics and after-sales services.
Along with these, one of the most mission-critical factors to bear in mind is staffing.
Would your company be building a development team from scratch? Will you require a staff fluent in non-native languages to do business in a global market? Or is your company simply looking to replicate a successful model from elsewhere – meaning your priority would be the availability of experienced talent that can jump in immediately and hit the ground running.
For example, one of the first decisions you’ll have to make is whether to hire new local staff in the country you’re setting up in. A hassle? It can be. But not when you utilise a GEO (Global Employment Outsourcing) solution like those offered by specialist workforce management companies like CXC.
Particularly popular in Asia, it’s a comprehensive international solution that’s ideal for hiring employees abroad when you don’t have a branch or subsidiary in the foreign location.
The GEO structure utilizes ‘employers of record’ (EOR) in each country of employment – already set up and ready to onboard and payroll new employees. This streamlines the hiring process and ensures that employers are in compliance in the host country, where the GEO partner relies on their local partners and experts.
In addition to payroll and onboarding, and extensive local knowledge, a GEO/Employer of Record structure can also support you with:
- tax administration
- Ensuring all employment contracts meet local standards
- Foreign exchange and in-country money movement
- Insurance, local laws and regulations
- Arranging work permits and visas for expat employees
Finding the right market expansion partner for your business journey into Asia could make a huge difference. There may be bureaucratic hurdles to face, and finding a partner that has successfully navigated similar hurdles in the past can be an invaluable asset
Laws can vary from country to country
Another critical factor concerns regulatory barriers; often major issues of complaint by entrepreneurs in Asia. Just another compelling reason why you should contract the services of a market expansion partner in this region of the world.
Laws concerning foreign ownership can be another major hurdle in certain Asian countries. For example, Thailand mandates that companies have 51 percent local ownership. Myanmar however does not have direct foreign ownership requirements, but many businesses prefer incorporating elsewhere due to the country’s complicated clearance processes and current political turmoil.
Singapore is a comparatively easier place to start businesses due to more transparent regulations and stronger government support. China has found great favour with foreign investors as well — its surprising “soft-touch” regulatory approach has allowed for massive development in recent times.
Like to know more about how best to plan your global expansion? Or are you interested in CXC’s comprehensive GEO/EOR structure that allows hassle-free hiring throughout Asia? Then do not hesitate to contact us for more information.