The internet has completely changed how we do business and has opened up unlimited opportunities and possibilities to those that want to expand worldwide and introduce their products or service to new markets.
Often this will require that the business opens a new location in a new country. While exciting, it can be overwhelming and be a very confusing process. Let’s assume, for example, that you wanted to start a company formation in Hungary. Where do you start? What do you need to consider? Here are four things that you need to consider.
1. Look into Local Banking Laws
Sometimes it can be difficult to open a bank in a different country. Some will allow non-residents to establish an account with them, while some will not open an account unless the business owner is a resident of the country.
There are creative ways to explore, like establishing residency, taking on a partner that is a resident, etc. It’s always a good idea to have a business bank account in the country you have a location in, so see what the laws are.
2. Make Sure You are Protected in All Countries
What happens if something goes wrong? Are you going to be protected? For example, in the United States, a business can be formed under an LLC and the owner’s personal assets can be protected in the event that the business is sued.
The last thing you want to do is put your well-being at risk. It’s always a good move to look into all liability issues, because while you may not anticipate it, bad things can sometimes happen even if they are out of your control.
3. Identify All Local Business Licenses and Fees
What do you need to legally operate in the new country? Are there certain licenses and certifications you need? Are there fees you need to pay? Knowing all of this ahead of time will save you not only time, but possible financial headaches down the line.
Make sure to research based on the product or service you will be selling. There are often generic rules and regulations, as well as industry specific ones you need to consider.
4. Fully Understand International Tax Laws
This is a big one. You should always make this priority number one. You need to know what your tax liability will be before you make any moves. What if the potential liability would make it difficult to operate profitably?
Look at both personal and business liabilities, and what it means for the taxes in your home country as well. This can get very sticky, so it’s always best to consult with an international tax law specialist.
