Once you have decided to open a branch or subsidiary abroad or even completely move your business abroad, you will have a long to-do list. Moving an office and employees abroad takes planning, organization, and strategy. This article is the first in a series on company relocation. The focus of this article will be on the logistics of moving an office abroad, while upcoming articles will focus on moving employees abroad. If you have not yet decided how to expand your business abroad, you should consider the many options available to you, including great options for a lean expansion that do not require the registration of an entity and the costs associated with a relocation or move. Read Globig’s article on 6 Ways to Do Business in Other Countries Without Setting Up an Office or Entity.
Below are the general steps you will take and the important considerations to make when relocating your company. Keep in mind, this is not an exhaustive list and the to-do list will vary by company. As you go through this process, you should consider working with a relocation agency, which can make the process easier and quicker. A relocation agency can help with each step of the process, from finding office space to moving and shipping. The Globig Marketplace includes vetted relocation experts ranging from nimble online specialists to full-service firms around the world.
Create a comprehensive relocation plan and strategy.
The logistics of physically moving a company abroad can be complicated, time consuming, and very involved. It is imperative to have a comprehensive plan and strategy well before your planned departure. Your plan and strategy should include the logistics of finding and setting up an office abroad, choosing the appropriate employees to relocate, and determining how to best support the employees relocating with you, which includes a comprehensive offer package (salary and any added benefits).
Find an office space.
Many companies send only a single or a few employees abroad during their initial expansion to scout out the market. Often companies choose to start out working from a co-working space or home, rather than set up an office. A co-working space is ideal because it has everything you need to get started doing business as well as a built in network of people and important connections you’ll need to be successful. Most co-working spaces rent desks or small dedicated office space, which include the use of conference rooms, phones, Internet, etc. Co-working spaces also offer great opportunities to network with other entrepreneurs and companies. Working from home is a feasible option for companies that only send one or a few employees abroad.
If you decide you do need a dedicated office, you should certainly begin your search before you arrive, however, you should also consider doing at least part of your search in person. Working with an agent will likely be the easiest and most cost effective way to search for an office, whether you plan to rent or purchase. Besides the more obvious features such as the size of the space and the cost of the rent, also consider where your employees will live, commute times, proximity to schools and other amenities, and how attractive these things will be in retaining and hiring good employees. Leasing terms will vary from country to country as well as the options for breaking leases.
Choose an appropriate business entity and register.
There are many reasons you may decide to set up a more permanent business entity and it’s best to register as early as possible. Most importantly, it can take a long time in some countries, especially if something unexpected comes up during the process. In many countries, you must have a registered company before you can move on with your other business logistics, including registering for taxes, opening a bank account, and renting office space or executive housing.
Register for taxes.
You should also register for taxes early, as soon as you are required to do so. Some banks require your business tax information to open an account.
Open a bank account and begin to establish your banking relationship.
It is important to open a bank account as soon as you arrive in country, or even before. You will need a bank account to make your first payments, including the setup of your office space, utilities, and paying employees. Keep in mind, your credit history does not follow you abroad, so it is important that you start building credit as soon as possible. It can take years to build credit and it may take you 6-12 months to get your bank account approved. Make sure you know what documents the bank requires to open a business account. Some foreign banks will require that you make an appointment in person to open a new account along with extensive research into the founders and senior executives, while others will allow you to open a new account online.
Keep in mind, it also takes time for money to clear into your bank account from overseas once you’ve been set up. You should plan to have a 2-4 week (more in some countries) buffer between when you send the money and when you should expect to receive and be able to use it.
Set up your office space.
If you decide to set up a dedicated office, rather than have employees use a co-working space or work from home, you will need to set up that space quickly. Your office setup includes the purchase or rental of office equipment and furniture and the setup of utilities. Aside from the required utilities of having an office, such as water and electricity, all business will certainly have phone lines and Internet access.
It goes without saying, phones and Internet access are a required part of business today. Thus, this is a very important early step in setting up your office. Phone lines can include landlines for the office and cell phones for employees. Having a local phone number can be helpful in establishing trust with your local customers. However, some businesses, particularly startups, get by with just cell phones. Think through your business requirements and seek out a package that includes all necessary phone lines. You may be able to use your current plan from your home country.
If you rent office space, you may be responsible for setting up and paying electricity, gas, and water. Ideally, utilities will be included in your rent. Keep in mind, if you use a co-working space, you won’t have the extra hassle of setting up utilities of any kind, including Internet.
Moving or relocating your company abroad involves many moving parts. Without a comprehensive relocation strategy and plan, the challenges, cost, and your chance of failure increase. Deciding on the appropriate business takes careful and counselled consideration and the registration often takes a long time, thus this needs to be done early on. Setting up an office doesn’t have to be a hassle. If your company can succeed working from home or a co-working space, you will cut out a lot of the moving parts.
Globig is here to help you with your business expansion needs around the world, even the U.S. Sign up today for a free consultation, and through our Marketplace, get access to vetted experts around the world.
Related Articles and Content You Might Like:
The Critical Global Expansion Checklist: Part #1
The Critical Global Expansion Checklist: Part #2
An Introduction to Going Global From A Cultural Perspective
