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Things to Consider if You Want to Trade in Another Country
Starting a business is never easy, but it can be even more difficult if you are UK based and want to trade overseas.
It could be that you have found a niche in another country and have the knowledge of that product to make a successful business abroad. However, there are pitfalls, as every country has its own rules and regulations that must be followed. Falling foul of a countryís trading laws could be very expensive, and in some places, they would close your business down.
You also may want to consider emigrating to the country you want to set up a new business in and that will need extra planning. Would you be meet the new countryís immigration criteria? Whatever country you are planning to trade in, if your business model depends on you emigrating to that country youíd need to make sure you qualify for residency first.
After decades of communist rule, Russia is now trying to expand its trade with other countries and is also encouraging new startups with foreign investors. There are very few restrictions on running a business in Russia. Some experts feel this makes it the perfect time to start a business, as regulations are likely to be tightened as their economy grows.
Of course, there are some things that are very different. As an example, if you need motor trade insurance in the UK, you can go to a comparison site like Quotezone.co.uk, which can help you find cheaper insurance by comparing quotes from a range of different providers. In Russia, on the other hand, third party motor insurance is the minimum legal requirement, but you might be able to arrange this insurance at the border if youíre importing a vehicle.
The Singapore government has a large range of incentives to encourage new businesses to start up there, and these have been very successful. As a country with no natural resources, it relies on commerce and tourism for its income. The concessions given to new businesses have been a large contributor to the success story of the country.
Tax rates are good too. You only pay 8.5% on the first $300,000 of profit and then it rises to just 17%.
Some of the differences between Singapore and the UK are that you have to obtain approval for the company name before you can use it and if the company is limited, at least one director must be resident in the country.
Spain can be a brilliant opportunity for UK businesses to expand into or start a new business in. The Spanish government is doing all it can to encourage free trade and businesses from abroad and they seem to be meeting with some success.
Many of the rules for trading in Spain are very similar to those in the UK, but there are exceptional differences. There is no VAT threshold, for instance, and everyone is IVA (their version of VAT) registered from the day they start trading. It does not matter if you are a sole trader or a multinational company expanding into Spain, this rule applies to everyone.
For non-limited company traders, their national insurance is very expensive. Where in the UK a sole trader pays a little over £2 a week, in Spain it is 250 euros a month. This difference becomes bigger if you are trading and a pensioner. In the UK you would not pay any NI, but in Spain it goes up when you pass pension age.
They speak the same language, have a vibrant economy, most business rules and regulations are very similar to the UK, and they have one of the lowest corporation tax rates in Europe. It is no wonder that Ireland is such a popular place for new startups, and for existing businesses to expand into.
Successive Irish governments have encouraged businesses to set up in Ireland, which could explain why more than 1,400 companies from around the world have got their headquarters there.
Consider Carefully Before You Trade in Another Country
When you are thinking of expanding into or starting a business in a new country, there are several things you need to carefully consider. The culture of the population matters a great deal and you need to find out if your product would appeal to them. You may need a network of local suppliers and you will need to understand how they work. It can be a help to use the services of a local agent to assist you as they may well have the connections you need.
Running a business can be very rewarding, and this is even more the case when you venture into another country, as you have the adventurous element of being somewhere completely new.