So you’ve decided to expand your business to Europe. Congratulations! Things must be going well for your organisation - and you've decided that it makes sense to set up a hub across the Atlantic to help grow your business globally. There are a thousand excellent reasons to widen your horizons and establish a European base, you don’t need us to tell them to you. But what you might need us to tell you about is just a few mistakes that firms make when they take the plunge and head over to Europe.
Every year countless companies, all buzzing with enthusiasm, come over to Europe, keen to set up a HQ. Many of them do their research and due diligence and seek out the services of a trusted expansion consultant. But some companies allow their zest and zeal to get the better of them and rush their international growth plans, and in doing so, they often make the same mistakes, time and time again.
We thought we’d take a look at some of the biggest blunders business make when setting up camp in Europe. There are quite a few, but we’ve picked the five most common mistakes that are made.
5 Common Mistakes when Expanding Business to Europe
- Not knowing what it is you hope to achieve
‘Let’s set up an office in Europe!’ It’s an exciting idea. But too many companies start acting on that belief before ironing out exactly what they want to gain from doing so. Planning is vital - understanding your goals for a European hub should be mapped out with identified success criteria and a detailed expansion plan. Fail to do so, and you could be making a big mistake in the location you decide on.
- Don’t jump into a decision, know what you’re looking for.
What’s critical operationally for your organisation? Do you need native English speakers for a call centre, perhaps? If you’re a tech company, is the skill set there? These are the sorts of questions you need to be asking yourself.
- Attempting to manage the process entirely on your own
Moving part of your operation to another country is a big task, especially if you're a young firm and have little or no experience in business relocation or foreign incorporation. There’s a surprising amount of different things to bear in mind about a move of this magnitude. Taking it all on yourself could prove to be a costly mistake. Don’t be afraid to seek help from experts (like us!).
- Siloing the move into different departments
It’s crucial you reduce the number of moving parts in your relocation. If you can keep the move simple and deal with the least amount of agencies and firms as possible, you’ll save time, money and cut out stress. Dealing with a hundred people will be a logistical nightmare. Banks, government departments, serviced office companies, HR outsourcers... Trying to manage and keep on top of all these different people is virtually impossible. Don’t silo - keep it streamlined.
- Choosing the wrong location from a logistics standpoint
If cost drives your move, then you’ll find your head turn by any number of beautiful European cities that can offer cheap labour and even less expensive office space. There might well be an underlying business case for choosing somewhere like Minsk for your Euro headquarters, but will these cut-price options offer you the business infrastructure that you need? What is the internet like there? The utilities? Public transport? What is the average standard of English?
So where makes sense? Well, Ireland is a gateway to Europe. The timezone difference between the US/Canada and Ireland is so much more workable than it is in Eastern Europe. The closest European city to North America, there are frequent flights from the US and Canada to Dublin Airport. Not only that, but it’s effortless to fly into Ireland for connecting flights. And it’s a whole 1,728 miles closer than Minsk!
Okay, so we’re a little biased here. But the reasons to choose Dublin over Paris, Munich or Moscow are compelling. Even if we do say so ourselves…
Choosing Ireland as a European Base
- Our flexible tax system means that we’re the ideal place to do business. The main tax incentives in Ireland include: 12.5% corporation tax rate on active business income, a 25% credit on qualifying R&D expenditures, a 6.25% knowledge box development tax rate and 100% tax relief for capital expenditure on IP.
- We’re easy to do business with - in fact, our government has gone out of its way to make us the most accommodating nation in Europe. We have easy incorporation procedures, coherent and straightforward employment laws and low corporation tax. Growth is fast, inflation is high, and we have the highest GDP across the continent.
- Our standard of living is high - Visiting Dublin or anywhere in Ireland won’t be a slog for any of your board members or staff. We’re a hit with tourists, residents and business travellers alike. Ireland is The Emerald Isle, after all.
- We know the language - Literally and figuratively. We inherently understand the needs of business here in Ireland. And can discuss it with you in perfect English. Although we admit, our accents sometimes take a little getting used to...
- Ireland is an established tech and innovation hub - Comms, future networking, content, apps, IT security, telecoms, medical tech, research, processing technologies, energy tech, data analytics management, it all happens here.
- We’ve got a young, skilled and highly-qualified workforce - Exactly a third of people in Ireland are under 25. We have one of the most educated workforces on the entire planet, with 52% of 25-34 year olds having a third level university qualification. And our workforce is flexible, adaptable and open to new ideas.
- We’re members of the EU - In fact, we’re the only native English-speaking members of the European Union. The EU offers free movement of labour and natural cross-border coordination. Ireland is also part of the Euro currency zone, making trading across Europe friendly and relaxed.
- We’re politically stable - With the shadow of Brexit looming over the UK, uncertainty and concern are the watchwords concerning the future of foreign business investment there. Those aren’t issues to deal with here. There’s no guesswork.
There are plenty of mistakes you can make. But if you’re sensible about your expansion, there’s no real reason to worry. Where you decide to locate your European HQ is entirely up to you. If it’s in the best interests of your firm to head to London, Warsaw, Lisbon or a small village in the Macedonian countryside, then go for it! We wish you all the very best with it. But if you’re starting to come round to the idea of expanding into Ireland, then speak to us here at Smart MBS. We can help you avoid all of these mistakes and so much more besides.