The ABC Of Starting Overseas Business

After leaving her overseas insurance underwriting job in 2007, Ashley Hunter decided to return to the United States and hang her own shingle. There was just one problem: She wasn’t landing the types of large accounts she handled during the years she worked for large insurance companies such as AIG.
Her former boss and mentor encouraged her to return to the Middle East, where she’d already built a reputation in the industry. So she moved to Bahrain and started her commercial insurance brokerage, HM Risk Group.
The bet paid off: In 2014 her five-person company wrote several million dollars in annual insurance premiums for startups, as well as Fortune 500s and other large companies, in the Middle East, US, United Kingdom and Australia.
That’s not to say that launching a company abroad was easy. Despite Hunter’s familiarity with the local business landscape, there were international laws and tax regulations to decipher, corporate customs to adopt and countless hours of travel between Bahrain and her satellite stateside office in Texas.
Setting up shop on foreign soil doesn’t make sense for all businesses. There may not be a market for what you’re selling. Overhead may be too high. Infrastructure may be too unstable. Working capital may be unobtainable. Tax, intellectual property and other corporate laws may not work in your favour. “Just because you understand the business in the US doesn’t mean it’s going to translate dollar for dollar someplace else,” Hunter says.
Mind the infrastructure
Before planting your flag in an emerging market, investigate transport, utilities, Internet speed, political and economic stability—even weather patterns.
Among the factors Carmen Benitez researched before renting an office in the Philippines are: proximity to bus lines, frequency of brownouts and propensity of typhoons to shut down area businesses. “Depending on where you are in the city, the drainage is really important,” she says. After a tropical storm, businesses in Manila’s hillier areas resume operations immediately, “but if you’re in the lower areas, they are out for a week.”
Even the most thoroughly researched details can change overnight, as New England native, Christos Perakis, CEO of Zoottle, knows firsthand. He co-founded the Wi-Fi hotspot provider last year in Greece under the assumption that the business wouldn’t have to pay local taxes until it turned a profit. “Now the current discussion is that they’re going to change the law, and you will have to pay taxes on revenue regardless of whether you’re profitable,” Perakis says. “So, that stymies growth.”
Commune with the locals
Acclimating to a new country takes time and effort, but it’s a mistake to limit one’s socialising to other expats. “If you’re just hanging out with the people who look and think and act like you, that will not get business done,” Hunter cautions. Better to live, eat and socialise among nationals so you can pick up the nuances of their culture, dialect and business attitudes, not to mention develop contacts.
The founder of the SideChef cooking app, Californian Kevin Yu, chose to rent out a room of his apartment using Airbnb for research purposes when he first moved to Shanghai. “You get a lot of details that you don’t get staying in a hotel,” he says, from breakfast rituals to friendly chitchat and local knowledge.
During the first six months of building SideChef, Yu (who speaks Mandarin) lived and worked with three developers in a three-bedroom apartment, partly to save money, partly to learn more about his team.
Embrace the business culture
Honouring local business customs can make the difference between winning and losing customers. In Bahrain, Hunter says, rapport is king; customers want to do business with “someone who feels like family” and offers personalised attention. For her, this often means wooing clients in all-day meetings and not learning for several weeks whether she’s clinched the deal.
Although most Bahrainis speak English, Hunter has learned that meetings are most successful when she begins in Arabic. “You will never get the respect you want if you don’t at least attempt to communicate in their language,” she says. “It’s the courteous thing to do.”
Also key: knowing what motivates locally bred employees. For Benitez, this means clearly outlining objectives in daily meetings so her Singapore and Manila teams stay on task. “It’s very different from the US, where people have a lot of feelings of empowerment,” she says.
Likewise, the Chinese nationals on Yu’s founding team wanted a salary and bonuses but didn’t care about equity in the company, like many US start-up employees do. “To be able to negotiate in a way that fits the environment is important,” Yu says. “Not everybody wants the same things. Having sensitivity to that will go a long way.”

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