Moving abroad and starting your business in a foreign country is a daunting task. It requires intense research and thorough planning. But all that stress and hard work can turn into one of the most rewarding experiences you’ll ever have.
I decided to move to Thailand in 2012 to start my first company. This decision allowed me to grow my business much faster than I could have in the U.S., and it made me who I am today. If you’re thinking of starting a business abroad, there are some basic things you’ll need to research. To make it easier for you, I’ve listed them here, along with a few tips I’ve picked up over the years.
1. Start with the legal stuff
The laws that apply to your business will vary greatly depending on whether you register it in the U.S. or another country. Since I was living abroad, and my business is entirely internet-based, I chose to register in a state with no income tax. These states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
I was also able to take advantage of the foreign earned income tax exclusion, which shields your first $100,000 of profit from federal taxation if you live outside the U.S. for more than 330 days in a year. These two tax benefits allowed me to grow my business much faster than I could have while living at home. I was able to re-invest profits back into my business that otherwise would have gone to Uncle Sam.
If you register your business abroad, there are three main legal aspects you’ll want to pay attention to: taxes, intellectual property and the political climate. I can’t stress enough the importance of finding an international tax lawyer who has experience dealing with the country you’ve chosen. If you can’t find one, search for entrepreneur groups in your desired country, and ask for referrals.
Also, you can use the Small Business Administration’s list of resources for doing business abroad. For individual tax considerations, the IRS also has a useful FAQ page. As for international IP rights, the World Intellectual Property Organization’s website allows you to search for IP laws by country in just a few clicks.
Researching the political climate in your potential country is also essential. Simply put, certain countries have less-than-favorable reputations with foreign entrepreneurs. You want to make sure you won’t be a year or two into business when a litany of new “taxes” pop up.
2. Investigate infrastructure
Once you’ve got all of that exhilarating legal research out of the way, it’s time to consider the country’s infrastructure. How much will rent and utilities cost? What transportation systems are in place? How fast is the internet? How often will the weather affect your ability to do business? Those are just a few of the questions you’ll need to ask.
When you research the country’s infrastructure, look into specific cities or regions you want to reside in. The country as a whole might meet all of your requirements, but that doesn’t mean every part of the country will. Things like internet connectivity, transportation, and climate itself can vary drastically from region to region.
3. Embrace the culture
If you want to successfully live — let alone do business — in a new country, you need to embrace the culture and gain at least a functional understanding of the language. Sure, you can get by on translators or spend all of your time with other expats, but frankly, if you’re going to do that, you might as well stay home.
When you interact with locals and speak their language, you open yourself up to a whole new world of experiences and possibilities. From a business standpoint, you’ll find it much easier to forge new relationships if you can communicate effectively. Even if the conversation starts in their native tongue and moves to English, you’ll both show and receive respect by making the effort.
Thanks to the internet, mobile apps, and more extensive resources like Rosetta Stone, it has never been easier to learn a new language. Pick up one of these resources or find a couple native speakers online to converse with before you go, and you’ll be speaking a new language in no time.
But don’t forget — learning the language is just one part of embracing a new culture. You’ll also need to learn personal and business customs. Unfortunately, it’s hard to truly grasp all of these customs before you experience them, so throw yourself into it wholeheartedly, and don’t take yourself too seriously. We’re all going to make a couple of silly mistakes when adjusting to new surroundings.
Move abroad, build your dreams
Like I said at the beginning, the choice to move to a new country and set up shop is a daunting one. But with thorough research and planning, it can be the most rewarding decision you’ll ever make.
If I could leave you with one last crucial piece of advice, it would be to find a partner: someone who’s native to the country (or has lived and done business there) to be your right hand. Their firsthand experience will prevent you from making simple mistakes due to inexperience, and it will make things much easier for you from the start while you’re still adjusting. And remember, there’s no such thing as doing too much research.
This article has been edited.
Bryce Welker is a CPA and the CEO of multiple companies in the online education space including The CPA Exam Guy.