10 reasons for opening a company abroad

The time to expand your operation outside of Brazil is now.

It was already difficult to open a company in Brazil. Growing it was even harder. But something tells you it’s time to look outside and grow bigger. But there are doubts: where do I go, how do I go, sell what, talk to whom… and they keep coming. Before these doubts, make an internal reflection about your business and its moment in the market. And ask yourself:

Why do i want to open a company abroad?

If one of your reasons is listed below, you can proceed to the next round of questions:

1) Expand the client portfolio

If your company is well positioned in Brazil or already serves a considerable portion of the market, you can expand your customer base by opening new markets (thus escaping from the saturation scenario). In addition, if you serve multinational companies in Brazil, you can search for opportunities to serve them in other countries. If you do a good job here, you can use these internationally reputable clients as your calling card.

2) Expose your brand globally

To enhance your brand and gain international projection, it needs to be exposed in other markets. In the fashion world, for example, opening concept stores in the main reference centers such as New York, Milan, Paris and London or positioning your products in marketplaces can increase your brand’s exposure level and win over customers all over the world. See how Melissa makes us proud in London.

3) Create a barrier to entry for your international competitors

You get the news that an international competitor is interested in the Brazilian market. The best way to learn how they position themselves is to act in the markets in which it operates. This exercise makes you create a natural barrier towards your competitor’s entry into Brazil, or at least it gets the message that in Brazil he will have to eat a lot of rice and beans to get to where you are.

4) Participate in global competitions

When you serve multinationals in Brazil, there are contracts that are negotiated to serve several countries. International contracts are usually processed at the headquarters of these companies. With an international CNPJ, the opportunity to compete in these areas is open, and you can become a supplier to this multinational in Japan, Poland, China, the United States… can you imagine?

5) Reduce operating costs

If your company imports a lot of prime materials, the machinery is expensive or your labor is very qualified and scarce in Brazil, it is worth developing a study to set up an advanced base outside Brazil, in which you can manage to reduce your operating costs and improve your competitiveness. If you already export, an option may be to create a unit outside Brazil to reduce the same costs and improve logistics, lower freight costs, and be closer to customers.

6) Search for new technologies

When you work with innovation, you need to be close to the most innovative countries and research centers in the world to keep up with the latest research and development findings. Countries that invest in research and development have tax incentives, qualified labor, and a very efficient trademark and patent regime for companies. See the ranking of the most innovative countries in the world here.

7) Recruit people to complement your team

When your business serves a niche market, you sell expertise. The best way to quickly internalize knowledge is to look for already qualified professionals. But they are not always available in Brazil, or the salary can be very high. In this case, looking for universities or international centers of excellence that train this professional may be the best source to find who you are looking for. In the case of opening a company outside Brazil, working with international teams generates an internal motivating factor and helps retain talent. It’s amazing how motivated your team is with the opportunity to spend few periods outside Brazil working on interesting projects.

8) Reduce currency risk

Did you know that your company can have multi-currency accounts out there? That’s right. If you export and want to reduce your currency risk, having an international bank account to pay and receive from international customers and suppliers in foreign currency can help you reduce your vulnerability to fluctuations in the Real.

9) Improve tax efficiency

If you export to countries with which Brazil does not have international trade agreements (see the list here), opening a company in another country with more international trade agreements can open up new markets. In fact, having a company in the European Union or NAFTA, for example, improves its competitiveness against international competitors with more efficient tax regimes than Brazil’s. Check out the list of all international agreements in force in the world here.

10) Take advantage of international public policy

When your field of activity is not regulated in Brazil, or the regulation is so restrictive that it makes your activity unfeasible, it’s importante to look at new markets to keep operating. On the other hand, when there is more advanced legislation in other countries, it is worth following the international movement so as not to lose market timing. A clear case is fintechs, in the UK there is a special regime called the Sandbox in which they can operate with flexible regulation or Canada’s funding and incentive exchanges. In general, grants and incentives are more attractive when the market is not as developed and new companies need to be attracted to the region. The big business centers in the world (such as New York, Berlin, London, Paris, etc) tend not to offer incentives to companies, as the markets are consolidated.

These are the top 10 reasons why companies open operations abroad. There are also personal reasons, such as, I want to provide an international experience for my family or visit new places, or I identify with other cultures. What is your reason?
Tell me here. See you in the world,

Raquel Kibrit

Sterna is the first Internationalization Boutique in Brazil. We can help you open your company abroad. Shall we have coffee? contato@sterna.co