Growing businesses face a variety of challenges all the time. From exploring new markets and pursuing global opportunities to keeping costs low and improving workflows for greater efficiency, it is a real handful. Many companies reach out to diverse talent, low-cost resources and new customers by setting up an establishment across borders. Although this move comes with its own set of challenges, it also helps companies expand their reach and grow their global presence, opening new avenues for profit and building their brand reputation.
3-step Checklist To Setting Up A New Legal Entity
Step 1: Consider Your Certainty About Business Expansion
Is your business ripe for expansion? Are you testing new markets or looking for full expansion? Even as you take the very first step into a new country, there are opportunity costs involved. Before formally investing a large sum of capital, partner with an established Global Employer of Record (EOR) to maximise your expansion efforts. Global EORs hold a wealth of expertise in hiring employees all around the world and will be able to provide valuable insight to the talents available in your country of choice. Outsourcing the hiring also means that employees can start being productive within a short time which allows companies can take their time to consider if setting up in that new market is feasible while testing the market.
Step 2: Evaluate Your Local Expertise
Does your expansion team have on-the-ground experience in the new market? Employment compliance and labour regulations are key matters when expanding overseas as non-compliance will lead to fines and even, bad press. A Global EOR can provide robust HR support as well as in-depth insights in local labour markets to further bolster your expansion team. It takes a load off the list of tasks companies need to conquer in a business expansion such as market research, formalising the company and more. Dollars and hours will be saved on trial and error.
Step 3: Assess Your Human Resources (HR) Department
Is your in-house HR team able to keep up with new labour laws and regulations? Instead of increasing your HR overhead to take on the HR scope of the global expansion, a Global EOR can work as your external HR arm specialising in multi-country compliance so you can expand overseas with ease. Meanwhile, your core HR team can focus on strategic HR matters such as building a workforce that is agile, scalable and has a sense of belonging, which can work beautifully for a company’s overall business strategy.
Potential challenges when setting up a legal entity across borders
1. Market Research
Understanding the market is not a once-off activity that takes place when you launch. As the market changes constantly, what was true a year ago would not be true now. Market research is a continuous process and helps to ensure your business operates on up-to-date information.
Every market differs in culture, practices and beliefs, what works in your home country may not work in a new market, hence, it is also important to localise your marketing approach. Form an in-depth picture of what customers want and how they behave to tailor your strategies and tactics. At the same time, keep channels from customers, employees, local partners and even suppliers open. Your breakthrough could come from their feedback on your products and services.
2. Inter-team Communication
A new out-stationed team also means a disconnect between the headquarters. An effective organisational system has to be set up to ensure clear channels of communication between the core team and the global team. This will allow the facilitation of training, culture impartation and work handover so that the subsidiary teams can be successful as well. It will also constantly build unity, teamwork and mutual understanding between the two teams.
3. Human Resources
HR is one of the core resources of every company, after all, a company is not made up simply by infrastructure or branding, it is made up by people. Your team has to be robust, dependable and trustworthy. More important, companies must have a good grasp of workforce requirements and operate in compliance with them.
Mitigate risks and navigate complex HR regulations with a Global EOR
One of the ways companies can mitigate the risks and navigate the complex regulations involved in setting up a legal entity overseas is by working with a Global EOR. Skilled in HR capabilities including visa applications, employment contracts, benefits management, recruitment, retention and payroll, it helps companies hire internationally and onboard new staff seamlessly. Concurrently, it ensures full compliance with local labour laws and best practices to minimise companies’ liabilities.
TG is a reputable Global EOR with over 100 years of HR experience. Its in-country expertise extends across more than 50 markets and is adept in solving diverse workforce issues. Its core strength is in compliance and risk mitigation, both of which are crucial factors for new market entries.
With the HR aspects covered, new teams can be started quickly in new markets, which will greatly reduce a company’s entry-to-market time. Possibilities are endless as it is replicable and scalable in many markets.
Are you ready to set up a new legal entity?
Perhaps it is time to delve deeper into the idea of engaging a Global EOR to manage your most valuable human capital.
Read more about our Global EOR service, or talk to TG at firstname.lastname@example.org about your global expansion plans and find out how it can accelerate your plans today!