Mexico — 9 min
Recent PWC research shows that nearly half of all company CFOs are currently in the process of expanding their business to overseas markets (or planning to do so soon).
As well as capturing a greater market share, global expansion can provide companies with many additional benefits such as increased brand exposure, new investment opportunities, and simple hiring opportunities in a new talent market. Expanding to a new location will also affect the taxes, zoning laws and regulations that a business will be subject to.
To help business owners understand the countries with the most attractive potential for international expansion, at Remote we’ve analyzed the world’s largest business hubs to create the Global Expansion Index.
Global expansion brings a host of benefits and new opportunities for business owners to explore. One is the increased level of brand exposure and revenue potential. International markets offer businesses the chance to reach new demographics, increase sales, and generate higher revenue levels. This is especially beneficial if the business’ home market has become oversaturated and there is a clear opportunity to tap into a less competitive market overseas.
If your company can launch products or services before your competitors, you can establish a strong first mover’s advantage. Expect strong brand recognition and credibility with customers, particularly in comparison to other foreign entrants.
Another key benefit is access to a wider pool skilled of talent. Recruiting high-quality candidates from a range of different backgrounds in a new market gives employers unique opportunities:
Foster a richer and more diverse company culture
Fill specialist skills gaps with a new pool of experienced professionals
Gain an improved understanding of local markets
Tap into unique sources of creativity and innovation
To reveal the top countries for expanding your business internationally, we analyzed 100 countries with the largest GDPs in the world against 10 critical expansion metrics.
Factors included the annual GDP growth rate, number of startups, corporate tax rate, labor productivity and the time and costs required to start a business to name a few.
The table below shows the top 20 countries ranked by their overall ‘Global Expansion’ score out of 10.
Global Expansion Score (out of 10)
The United States ranks at the top of our global expansion index, revealing it as the best country for businesses looking to expand overseas. The US has by far the highest number of start-ups out of all countries we analyzed at 73,553; to put this into perspective, the second highest number was 14,667 in India – nearly 60,000 less.
The US also has one of the shortest times required to start a business at just 4 days, along with a fairly reasonable average startup cost of $725 (though this is the highest cost of all the top five countries on the list). It ranks among the top five countries for labor productivity with a GDP of $70.6 per hour worked, and even offers a very good broadband speed of 203.81 Mbps on average.
Overall, the United States is one of the best locations in the world to operate a business, and it’s easy to see why so many companies set their sights on expanding here.
The second location on the list is Singapore, a small country in Southeast Asia with a very big business output. Singapore actually has a higher annual growth rate than the US (7.6% vs America’s 5.7%), as well as less tax on profits (17% vs 21%) and fewer tax payments made in a year (5 vs 11). It also has the fastest broadband speed on the list at 255.83 Mbps, and a low average cost of just $238 to start a business.
Additionally, Singapore currently lists 1,062 start-ups – which is still a very impressive number, despite paling in comparison to the number in the US.
Ireland takes the third spot on our list, with the greatest annual growth rate of all countries in the top 20 (13.5%). It has far fewer start-ups than the US or Singapore with only 452, but also has one of the lowest tax rates of all countries (12.5%) and a very low average cost of just $86 to set up a business.
Venezuela places at the very bottom of our list, ranking as the country where it takes the longest amount of time to start a business at an average of 230 days. When compared to countries like New Zealand and Singapore where it takes just a day or two to get a business going, this is definitely less than ideal for anyone looking to make a quick move.
Other countries where it takes a long time to start a business are Iran (73 days), Ecuador (49 days), Bolivia (40 days) and South Africa (40 days).
Time required to start a business (days)
When it comes to costs to start a business, United Arab Emirates received the lowest score thanks to its expensive start up costs of $7,444. Italy, Qatar, Lebanon and Austria also recorded very high business start-up costs, all costing between $2,000 and $5,000.
Since setting up a business is so expensive and time-consuming in countries like Venezuela and the United Arab Emirates, it may be best to use an employer of record (EOR) if you want to expand your business here. An EOR is a global employment services provider that helps you employ people legally in other countries, and handles things like payroll and taxes for you. EOR is a great option for businesses wanting to test out a market before expanding permanently.
Cost to start a business ($)
United Arab Emirates
While our index reveals the top countries to target for international expansion, there’s more to the success of a global growth strategy than costs and timeframes.
These are five additional factors that you should consider before expanding your business overseas:
1. The market landscape
Before expanding your business internationally, you need to undertake extensive market research to understand the target destination’s market landscape. This is vital to assess the demand and competition for your business offering.
Not only will it help to inform your business strategy of the strengths, weaknesses, opportunities and threats of the new market, this will also have a direct impact on your overall success.
2. Laws and regulations
When expanding across borders, businesses need to consider the advantages and limitations of laws and regulations which vary from country to country. Legislation differs regarding employment, trade, investment, data protection and taxes to name a few. As a starting point, you can use our country explorer as a guide to employment in any country.
Laws and regulations cannot be ignored otherwise you and your business could face strict penalties. Opening local entities, setting up payroll and benefits, and trying to keep on top of local employment laws all take time, cost money, and delay your journey to success.
It doesn’t have to be painful. Remote’s global employment services are specifically designed to simplify the way you hire and pay international talent. We manage payroll, taxes, benefits, and compliance - allowing you to focus on your global growth.
3. Consumer and business culture
Another important factor for international expansion is understanding the language, religious and cultural norms within the target country.
From marketing techniques to business etiquette, social and cultural norms can be complex but it is vital to get it right to avoid offending customers, clients or employees. Understanding and adapting to embrace the local culture will allow your company to maximize success in another country.
Remote can help to act as your trusted local partner in each new country of operation. You can expect personalized service from our HR and legal experts during every step of your global hiring journey. Rely on Remote’s in-country expertise to give you the type of knowledge of the local workplace culture needed to ensure your employees feel valued, connected, and supported.
4. Economic and political stability
Understanding the economic and political landscape of a country is also important when expanding your business overseas.
Conducting a thorough analysis of economic and political indicators over time will help minimize risks of global expansion. Laws and regulations can change quickly under unstable governing bodies which can have a big impact on how your business operates.
5. Managing a distributed workforce
The ability to effectively manage an international workforce is another key component of a successful international expansion. Managing remote employees effectively will set you up for sustainable success in new global markets.
Building a remote-first culture allows you to make your new international employees feel connected from the start and avoids the common mistakes of companies that attempt expansion without integrating new team members into the organization.
Remote’s archive of educational resources is packed with practical advice for leaders managing globally distributed teams, but the following three pillars of remote-first management will help anyone build connection and belonging during the initial stages of international expansion:
Be available and responsive - Make time for your team and ensure they feel heard and respected. Schedule regular catch ups but make sure they know they can come to you with ad-hoc questions and concerns whenever they need to as well.
Make meaningful connections - On the surface, it might seem that there’s little in common between yourself and your remote employees, but this is unlikely to be the case. Make the effort to get to know your team and facilitate meaningful connections, this will make working together easier and more enjoyable - especially during rough patches.
Ensure your feedback is constructive and actionable - If a piece of work needs improvement, be specific about what should be done and empower them with the resources they need to improve the quality of the outcome.
To reveal the best countries for global enterprise expansion, we analyzed and ranked 100 countries with the largest GDPs in the world on the following ten metrics:
GDP growth rate - annual growth of the GDP over a year (%).
Number of start-ups - number of new businesses registered in the country.
Corporate tax rate - thetax on the profits of a corporation (%).
Tax payments - number of tax payments made each year.
Access to the internet - average broadband speed (Mbps).
Time required to start a business - number of calendar days needed so a business can operate legally.
Registering property - the number of days required to register a property.
Labor productivity - GDP per hour worked.
Cost to start a business - the total cost for a small to medium size limited liability company to start up and formally operate.
Enforcing contracts - number of days taken to resolve a commercial dispute.
Each country was given a final ‘Global Expansion’ score out of 10.
Please note: Macao and Turkmenistan were removed from the final index due to a lack of conclusive data available.
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