Most common foreign entrepreneur’s mistakes when entering a foreign market.
Many investors make similar mistakes when starting a new business in other countries. Avoiding those mistakes will make your whole way easier.
✓The first mistake is a poor investment plan. A good investment plan should consider as many business aspects as possible. It should consist of short-term investment plans and business plans for at least 5 years. However, don’t let the planning process hold you back and try to make the plan perfect. You cannot predict everything, so your plan should be flexible.
✓The second common mistake is not using tax minimization options where they are available. Governments often encourage foreign investments by providing enormous benefits to businessmen. Prior to starting your business in any new country, make sure you know everything about those.
✓Number 3 mistake is not benefiting from double taxation agreements. To promote a better business environment, many countries have signed treaties which allow avoiding double taxation. This means you may get tax reductions and incentives. Make sure you know your options.
✓The fourth mistake is not knowing the legal system of the country. While general rules are pretty the same in many countries, each state may have its own peculiarities. Things get even harder if you don’t know the country’s language. This is one of the reasons to hire a legal consultant when entering a new market. The idea to rely on free Internet sources is bad.
✓And finally, the number 5 mistake is avoiding due diligence procedures. If, for example, you decide to invest in a ready-made company, you should be sure that the company doesn’t have a tricky past which will cause you problems in the future. It is better to invest into due diligence than later regret you did not check how safe the legal entity is.