International Expansion

Complete Guide On International Expansion: What Companies Should Know

Are you looking to go global? International expansion requires detailed preparation. Find out what aspects of the business to consider when expanding to new markets.

Stefana Zaric
Written by Stefana Zaric
September 28, 2021
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Keeping up with the trends and looking for new opportunities is essential if you want your business to grow. Have you considered expanding to the international market yet?

Take a look at Roku or Netflix, for example. These companies recognized their chance to grow, along with most businesses that planned the expansion before the COVID-19 pandemic hit.

Companies considering globalization didn’t give up on their strategy, at least not long-term. What’s more, they decided to leverage access to the global workforce to carry out their plans, so the coronavirus outbreak seems to have pushed many hesitant businesses to go global.

With the newest trends in the world of work, there are no more outdated limitations that prevent you from achieving your goals and reaching new market opportunities outside of your home country.

If you’re ready to dip your toes into the global talent pool, broaden your target market, and start a business expansion, this article will walk you through everything you need to know before you join the list of multinational companies in their business ventures.

Why do companies choose international expansion?

Expanding into overseas markets seems to be easier than ever.

Even the pandemic hasn’t stopped most businesses that planned to go international - the benefits apparently outweigh the risk that the coronavirus poses to the global economy and doing business in general.

And what are the most common reasons for companies coming out of their home market?

1. Market share

A survey showed that most business owners are looking to capture market share - 49.5% of respondents claim this is their main reason for not putting a stop to their expansion plans. This is a common answer among companies all over Europe.

2. Sales presence and diversified investments

A large percentage of executives also want to expand their sales presence and diversify their investments and markets. When present in different markets, for instance, Asia, Europe, and North America, your revenue doesn’t only depend on the fluctuations in one market - it’s easier to have a plan B during economic hardships in one market.

3. Access to global resources

A common reason for expansion to global markets is also the acquisition of top talents across the world. An international business may also find technological resources easier if they go beyond their local market.

4. Meeting new cultures

A company from Canada or the United Kingdom may benefit from new perspectives and fresh ideas from Asia or developing countries from Europe or Africa. Globalization has given us a chance to learn from each other more straightforwardly than before.

5. Better customer service

Global markets also allow you to hire people in the countries where your clients are from. Not only can that bring in new customers, but it’s also a good way to provide excellent customer service. You’ll hire an employee that can take care of your client locally, regardless of different time zones, currencies, cultural differences, distance, and other potential obstacles.

6. More revenue

New customers and clients also mean more revenue. For many companies, doing business in a foreign country drives revenue growth, as it may come faster from a foreign market than the local one. That improves a company’s stability. A wider customer base also helps a business stay competitive in an over-saturated market.

Of course, there are challenges many companies will have to face when they become global businesses.

Their operations will become more complex, and they may find it difficult to maintain the company culture, especially if they’re running a remote team. In some cases, they may need to hire an Employer of Record (sometimes referred to as an international Professional Employer Organization - PEO) to handle the company’s payroll and people management. A specific amount of business resources will also need to be redirected to tax concerns, given the compliance challenges and local laws.

How to plan your global expansion strategy

Whether you’re a startup or a big corporation and whether you're planning mergers or setting up EORs, reaching new markets requires a well-thought-out global expansion initiative.

If international growth is within your plans for the near future, this section may help you determine what you need to focus on.

Talent planning

Did you know that the US middle market employs over 44 million people? Among them, the fastest-growing ones take talent planning very seriously, especially if you’re expanding to new markets. You will need experts that you can trust so a subsidiary is running according to the plan, or your new customers are taken care of thanks to your newly employed local talent.

What are the two key aspects of talent planning? Identifying the vital positions that you need to fill, and identifying the employees you can’t afford to lose. To complete these tasks with success, companies need to include the management in the talent planning process to achieve the four core goals:

  1. Align your talent strategy with your corporate growth strategy
  2. Build processes that will ensure a talent planning system
  3. Involve the executives in the process instead of leaving everything to the HR department
  4. Make sure your employees understand how valuable this process is by involving them, as well

Opening a subsidiary

When expanding to a new country, you need to choose how you’re going to hire people locally. Typically, you have three options. You can:

Each of these possibilities has its advantages and disadvantages, with a subsidiary being the most suitable option for those who really want to be present in the local market and build more trust around their brand.

A subsidiary means that the daughter company will act as a separate legal entity from the holding company. That implies opening bank accounts in local banks and hiring local people so the business can really operate as a separate company.

Opening a subsidiary usually costs more than outsourcing an EOR or hiring independent contractors. It also requires more paperwork and being extra careful with compliance matters. That’s why it’s necessary to do thorough market research before making the final decision.

Hiring remotely

The process of hiring remotely can be a bit more challenging than hiring people in person. However, if you plan this process carefully and carry out appropriate interviews to determine if someone is a good fit for your company culture, the procedure can go smoothly.

To hire remotely with success, make sure you set up the whole process and define everyone’s roles and steps that need to be taken. Ensure that the job post offers all the necessary information and all rounds of interviews are explained.

The real work comes after you’ve chosen a suitable candidate. Whether you open a subsidiary, work with an EOR, or hire contractors, you need to ensure (or have the corresponding team do it) that all paperwork is in order, that the contract is clear and compliant, and that your new employee goes through the same onboarding process like everyone else. That will ensure minimal workflow disruptions.

Want to scale your business by leveraging European market? Learn more about international hiring and building your global team.

Staying compliant with laws and regulations

Whether you outsource payroll and HR services or you have an in-house team to take care of it, compliance is a critical aspect of doing business globally.

When you enter a new market, you need to explore labor law and other related regulations if you’re planning to hire people from that country.

On the other hand, regulatory and legal compliance goes beyond labor law - you need to make sure that none of your business procedures goes against the local law to avoid potential legal issues.

Taxation is just one aspect of it. Your obligations will depend on whether you’re opening a subsidiary, hiring contractors, or through an EOR, what country you’re generating the revenue in, how high your revenue is, whether there’s a tax treaty between your country and the one where your new business is, etc.

Keeping your remote team motivated

Employee wellbeing strategies may be one of the most neglected parts of global expansion for many companies. Their main focus is on the technical aspects of doing business, and if they don’t tackle this issue in time, they may face low employee retention and employee happiness index.

Make sure you include different team-building activities in your plan and educate yourself about various ways to boost your remote team’s morale and keep them motivated and appreciated. That’s what brings productivity and results for the whole business.


Clear procedures will make everyone’s jobs easier as you will inevitably face challenges such as incompatible time zones.

It may be difficult to schedule a virtual meeting where everyone in the team can be present, and that’s where automation software can be truly helpful. Automating daunting tasks will give your staff a chance to organize their time better and reduce the possibility of errors in reports.

Another good idea is to pair up people who live in the same, or similar time zones.

Creating a new marketing strategy

Entering a foreign market doesn't only mean adapting your business model or investigating possible needs or opportunities for new products. It also means you'll need to invest time and money into building a marketing strategy that will properly tackle the needs and pain points of the new market.

These adjustments refer to many aspects: new partnerships, brand positioning, choosing appropriate marketing channels, and more.

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Global expansion for global success

Global expansion may have a lot of aspects to look at and a lot of steps to take during the preparation stages, but it’s sure worth it.

If you’ve done thorough market research and you believe the target market has a true need for your products or services, your first step should be to gather experienced professionals whose expertise you trust.

They’ll help you create a fail-proof international expansion strategy and open the doors of new growth opportunities for your business.

Do it quickly and compliantly with Deel

Staying compliant with the local laws is the number one concern for many employers wanting to hire internationally,but don't let it stop you from executing your international expansion plan.

Deel ensures each contract a full-time employee or contractor signs is entirely compliant with local regulations. Finally, there is no need to learn a new set of rules each time you're ready to hire in a new country.

Sounds like the solution you're looking for? Read all about managing compliance seamlessly, or book a demo to see Deel in action today.

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