One of the biggest lessons of 2020 was that diversification is a valuable asset in times of uncertainty. Staying within your home market can limit your potential for profit and increase your exposure to negative changes in domestic market conditions. Expanding into new countries can reduce the impact of a slowdown in one particular market.
Companies that have been best suited to survive a tumultuous 2020 have been those with a large, diverse customer base and Morgan Stanley has predicted it will be emerging economies that recover quickest in 2021, forecasting average GDP growth of 7.4% across that section of the global economy.
Diversification doesn’t only protect your business. It can enhance it. The global talent pool has undergone an enormous shakeup in 2020 and many employers faced difficult decisions with their key talent. The Harvard Business Review said companies looking for success in 2021 must possess “the ability to see beyond the acute phase of a crisis” and exploit the situation “to drive growth in new areas”. Hiring internationally can bring great benefits in terms of adding skills to your business, increasing language capabilities and bringing real local knowledge to help you access opportunities. Europe is a successful hunting ground for US firms looking for unique talent. Europe’s population exceeds 742 million and has more rapid growth in the developer talent pool than in the US.
With the widely publicised research breakthroughs on vaccines against COVID-19 and plans for vaccinations to be rolled out in the first half of 2021, there is more than a glimmer of hope that most economies can return to some sort of new normal in the not too distant future. With Joe Biden now President of the US – the largest economy in the world – talk has turned to a more cooperative approach to global trade too.
Why is 2021 the right time for you to grow global?
Sir Martin Sorrell founder of WPP plc, the world’s largest advertising and PR group, said in an interview in November last year that ‘If you can’t grow your business in 2021 you never will’. Although he was referring to the digital and advertising industry, we are already seeing positive progress in other sectors as well.
Jamie Richardson of ZEDRA London said ‘We saw a number of companies in a variety of sectors put their expansion plans on hold in 2020. Those same companies – particularly those in healthcare, biotech, life sciences as well as the broader SaaS industries– are now deciding that 2021 will be the year they make the move overseas. Whether that’s into the UK, Europe, Asia, Oceania or in many cases, even multiple markets simultaneously. There is a feeling among well capitalised companies of not wanting to be left behind as we enter this new chapter. Given that setting up in a new country takes time, more and more companies are getting in touch with us now to get the ball rolling.’
Home from Home
One of many destinations seeing a strong demand for global expansion is the Netherlands. Home to Tesla Motors, Nike, Cisco and Netflix’s EMEA HQ, the Netherlands welcomes top companies in a variety of sectors and consistently ranks highly in categories like global innovation.
‘Here in the Netherlands, we expect a strong appetite for global expansion, particularly from the Americas, Asia and Europe in 2021. The Netherland’s political stability, strong economy, extensive double tax treaties, excellent infrastructure and skilled workforce make the country an alluring option for international businesses,” explains Erik-Jan Schoop, Commercial Director, ZEDRA Netherlands.
Getting your global expansion off the ground
‘Regardless of whether you’re expanding internationally for the first time, or if you’re already experienced in setting up operations abroad, working with an advisor who understands the local landscape and regulations is vital,’ says Piotr Augustyniak, ZEDRA’s Head of Central Europe. ‘Global expansion can be complex and rules and regulations vary from country to country, even within the EU. Past experience in setting up foreign operations doesn’t necessarily guarantee future success. A trusted partner who can provide tailored support that understands your ambitions and meets the needs of your business and employee is critical,’ he adds.
Wherever you have in mind as your next international destination, ZEDRA’s global network of offices and local partners can assist you on everything from company set up, tax and legal compliance to payroll, HR and immigration. You can read more about the initial global expansion considerations and how we can help in this article.
2021 is set to be an exciting year of growth both for established multinationals and for companies expanding internationally for the first time. If you would like to find out how we can help you, please contact Jamie Richardson, Piotr Augustyniak or Erik-Jan Schoop.