Is Your Business Ready For Overseas Expansion?

The Great Expansion: Is Your Business Ready to Go Overseas?

With travel opening up again, business owners are raring to go when it comes to future overseas workforce expansion. Before you take flight, consider these challenges.

Expansion overseas may have seemed risky to many business owners during the height of the pandemic. But as we embark on a new year, decision-makers are now resuming their plans to grow their businesses across the region and beyond.

If your organisation has been reaping consistent profits, perhaps you too have considered expanding to meet the demand in other countries. Costs and resources are usually the foremost considerations, but there are other challenges that stand in the way of becoming expansion-ready.

Travelling with COVID-19

With many countries having greater control over the pandemic, business travel is expected to pick up again ¹.

Despite that, flying back and forth between one’s country of work and country of residence may be less sustainable cost-wise. With shifting travel regulations, even the best-laid travel plans are subject to change at the last minute. Even without any travel mishaps, you’ll have to factor quarantine periods, vaccinations, medical insurance, and other safety measures into your business costs. With a large cross-country workforce, this can make business expansion a less profitable venture in the near future.

Of course, the issues of frequent travel can be limited by hiring locals from your host country. That, however, comes with its own set of challenges.

Cultural & Language Barriers

Being able to communicate effectively with both your target audience and your local workforce is vital to running an effective business. But even if one speaks the language, differences in cultural norms and expectations can get in the way of a harmonious work environment.

These issues can be navigated by having an on-site hiring team that’s well-versed in the cultural norms of the area ².

 They can ensure that your overseas hires are on board with the company’s culture, and will be able to identify potential conflicts before they occur.

Maintaining a Physical Presence

Of course, having an on-site workforce usually means having an on-site physical presence in your host country to comply with regulations. Typically, this means registering a branch office in the host country or establishing a legal entity ³.

Each has its own advantages and disadvantages depending on the host country’s laws. There is another option: a partnership with a PEO service vendor in the host country.

Why use a PEO in an overseas expansion?

In a nutshell, a PEO vendor acts as a co-employer for your overseas workforce. PEO services usually include HR duties such as payroll, tax compliance and employee benefits management, with the advantage of being well-versed in local culture and expectations. Businesses in partnership with a PEO firm report higher growth and greater returns of investment, as opposed to handling these matters in-house ⁴.

Here at AYP, our team of PEO professionals are experts in HR laws and regulations of various countries in Southeast Asia. With us handling your HR-related matters, you can focus your time on the future of your core business, wherever you choose to call your new home.

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1. Business travel demand expected to surge in 2022, but full recovery still two years away. CNBC. November 2021.
2. 3 Steps to a Successful International Expansion. Rashan Dixon. Entrepreneur Asia Pacific. March 5 2020.
3. Cross-border expansion: What are the key considerations? TMF Group. September 2021.
4. The ROI of using a PEO. McBassi & Company. September 2019.