HR international expansion guide
Expand globally quickly and securely
Growing internationally presents both demanding challenges and substantial rewards for organisations aiming to access overseas markets and recruit exceptional people. However, unfamiliar regulations, cultural variations and extra administrative burdens can introduce notable risks and expense.
As a leading global HR platform with first-hand experience of expanding internationally, we can provide all the tools required to tackle these obstacles. We can also support your decision-making and help you deploy resources more efficiently as you enter new markets.
When we discuss global expansion, we speak from experience. We have built and grown a workforce of over 1,000 people across more than 70 countries and partner with organisations on every continent. We understand what it takes to expand successfully overseas.
What you'll learn in this guide
In this guide, we draw on that knowledge and expertise to offer practical recommendations and tactical insights. We provide tried-and-tested advice not only on entering new markets, but on scaling sustainably and building long-term success.
Specifically, we’ll:
Explain how to build a resilient global presence
Examine localised approaches that shield your business from cultural and regulatory pitfalls in new markets
Set out the guiding principles of sustainable expansion
Showcase the tools and procedures that make the process simpler
Table of contents
What is international expansion?
Effective expansion strategies
Building an international team
What is international expansion?
International expansion occurs when a company extends its activities from its domestic market into one overseas, thereby broadening the organisation’s market reach.
Hiring international talent is often central to a global expansion plan, as the right appointments provide a solid base and bring invaluable local market knowledge.
The idea of entering foreign markets can be intimidating for any business — particularly small and medium-sized enterprises. The process can be complicated, draw out over time and be beset by unexpected risks. Yet, with the appropriate strategy and tools, the potential rewards can be substantial.What does international expansion look like?
Historically, international expansion often necessitated creating legal entities in the target countries. Today, businesses increasingly consider alternative — more cost-effective — routes to global growth.
Crucially, international expansion is no longer the preserve of large, established firms. Globalisation and technological advances now enable smaller businesses to operate across borders more easily.
“Despite an uncertain economic outlook, 72% of global businesses are planning ambitious expansions into new markets, supported by major investments in digital technologies.” Equinix Global Tech Trends Survey 2023
Four ways to expand internationally
Regardless of your organisation’s scale, there are several routes to international expansion. These include:
Exporting
Exporting means selling goods or services to customers overseas, either in person or via the internet.
Exporting can take many shapes, such as international e‑commerce. With global payment providers and storefront platforms like Amazon, Shopify and BigCommerce, you can sell to customers worldwide without maintaining a physical presence in those markets.
Licensing
Licensing is where you grant another business the right to use your intellectual property — such as trademarks, patents or copyrights — in return for royalties or fees. This lets you extend your brand and expertise into new markets without operating there directly.
This can be an attractive option if you own IP — for example a software or technology — with multiple applications, or if your brand already has recognition.
Acquisitions and mergers
Purchasing or combining with a foreign company is another common path to expansion, with cross-border mergers and acquisitions growing strongly in recent years.
This trend highlights the strategic benefit of acquiring or merging with established firms to gain access to new markets, technologies and customer bases.
Joint ventures and strategic alliances
Joint ventures and alliances are formal collaborations between firms in different countries designed to access fresh resources, expertise and market reach. An alliance lets you enter new markets, spread risk and exploit complementary strengths.
Unlike a merger, the objective is to form a mutually advantageous partnership, typically with organisations in different sectors.
Direct investment
Direct investment means putting capital into a foreign enterprise with the intention of exerting some control over its management or operations.
Some investors go further by establishing a physical presence in the country — typically by forming a subsidiary or branch. This offers greater control and influence over operations in the overseas market.
This approach is increasingly favoured, with more companies stepping up investment in under-served regions such as Africa, southeast Asia and Latin America.
“Emerging economies — which once represented no more than 15% of the global economy — now account for nearly 50% of economic activity.” Mauro F. Guillén, BBVA
What are some effective international expansion strategies?
Your global expansion plan should act as a route map for scaling. As a guiding 'true north', it ought to set out the concrete actions your organisation will take to reach its expansion objectives.
“In recent years, bold global expansion could have been seen as too risky or too dependent on capital investment in physical infrastructure. Now, things have changed.” Karl Strohmeyer, Chief Customer Officer at Equinix
International expansion strategies typically follow one of three routes:
International strategy
Under this approach, your company sells products or services into foreign markets while keeping production in the home country. This lets you leverage existing production capabilities to serve overseas customers.
Exporting products or services allows you to meet international customer needs without establishing local manufacturing facilities, enabling a consolidated growth approach that uses your existing strengths and expertise.
This option is commonly favoured by small firms and startups.
Multinational strategy
A multinational strategy involves operating in several countries and adapting your offerings to local market conditions, acknowledging that different regions have distinct preferences, cultural norms and regulations.
To better serve these markets, your company may:
Alter your products or services to suit local demand
Customise your marketing and communications
Set up local production or distribution facilities
This strategy focuses on meeting the particular needs and tastes of customers in different countries while maintaining a global footprint.
Global strategy
A global strategy treats the company as a single unit offering a standardised product or service across countries. The emphasis is on standardisation rather than adaptation, maintaining a consistent brand and product globally to benefit from economies of scale.
This strategy simplifies operations, supports centralised decision-making and capitalises on global brand recognition.
It is generally preferred by larger, more established organisations.
Do you need to establish a legal entity to expand internationally?
Not necessarily. That decision depends on your organisation’s aims and resources.
For some firms, setting up a legal entity is the appropriate route. If you have sufficient capital and time, and it aligns with your objectives, it can be the most advantageous option.
For many businesses — particularly startups and small firms — forming legal entities in multiple countries is impractical.
Beyond the resources needed, creating a legal entity is a significant commitment. If plans change, that investment and effort may be lost — and you could face the complicated process of dissolving the entity.
Partnering with a global HR provider gives you more flexibility and requires less commitment. For example, you can test a region by engaging independent contractors first; this enables quick international hiring and makes it straightforward to end the arrangement if things change. Remote's Contractor Management platform lets you hire, onboard, and manage contractors in a straightforward and cost-effective manner.
If progress is favourable and you decide to recruit employees as you expand, you can use an employer of record (EOR) service — such as the one offered by Remote. An EOR enables you to legally hire staff overseas without the time, cost, and complexities involved in opening a legal entity. This lets you scale international hiring across multiple markets quickly and in a compliant manner. As you expand globally, you can also draw on Remote’s local HR, tax, benefits and payroll expertise. This removes the need to source local suppliers and helps ensure ongoing compliance with local employment and tax rules.
We will outline how this operates in more detail below.
What is the best time for international expansion?
Timing is an important factor when entering a new market. But how can you determine if the moment is right to expand?
Below are a few signs that it may be appropriate to look beyond your borders:
If your domestic market is saturated and there are few opportunities for further growth, it could be sensible to investigate international expansion. Ensure, however, that your business is stable and successful at home before you branch out.
A notable volume of orders or enquiries from customers in a particular foreign market may point to an opportunity for growth in that region.
If your research shows strong demand for your product or service, limited competition, or supportive economic or regulatory conditions in a foreign market, that could signal an opportune time to expand.
If your business offers a distinctive product, service or technology that gives it an edge in a foreign market, it may be worth exploiting that advantage through expansion.
If you can readily adapt your products or services to suit a foreign market and there is clear demand, this improves your likelihood of success abroad.
Hire anywhere with Remote's EOR
Whether you plan to employ a single international worker or thousands, Remote has the experience, infrastructure and expertise you need. Our market-leading employer of record services deliver a first-class experience for your global team — plus transparent pricing, legal safeguards and peace of mind for your organisation.
There are many reasons why taking your business international could be the right move, including:
Talent acquisition
One of the principal benefits of international expansion is the opportunity to tap into new talent pools.
Employing people overseas gives your organisation access to fresh skills and perspectives, and enhances diversity and inclusion. A landmark McKinsey study found that diverse workforces are 33% more likely to outperform their peers.
Hiring international talent can also be more cost-effective, particularly when roles are remote.
Remote can help you find top talent in overseas markets, and hire, onboard, and manage them quickly and with ease.
Brand exposure
Expanding internationally increases your visibility and reputation in new markets, exposing you to a wider audience and building trust and familiarity. Over time this can boost brand recognition and revenue.
Happier employees
When you recruit globally, employees often appreciate the remote model and its benefits more. In our latest Global Benefits Report, we found that 78% of remote workers were more satisfied with their benefits compared with 60% of on-site staff.
This greater engagement supports retention and makes companies more agile. In our 2023 Remote Workforce Report, 72% of companies reported improved productivity after adopting a remote, globally distributed workforce model.
Increased revenue
As noted, international expansion opens access to new markets and customer segments, unlocking additional revenue streams. It can also help you outperform peers, with firms expanding across borders generating an extra 1.9% in annual shareholder returns compared with competitors that do not expand.
McKinsey also reports that companies already experiencing strong domestic growth see an additional 2.6% in annual returns from international expansion.
Potential cost savings
Alongside higher revenue, international expansion can yield cost savings. Entering a market with lower costs for materials, resources or wages can be advantageous.
Localised insight
Entering new markets requires local knowledge and expertise. Without it, you risk alienating — or even offending — local audiences and partners through avoidable communication errors or deeper cultural mismatches. You may also be unaware of certain local business practices, costing time and money.
Hiring people who are local and culturally attuned will help you avoid these issues. Whether you engage consultants on a contract basis or appoint a permanent employee to oversee activities, Remote can help you identify and recruit the right person.
“Hiring international employees gives your company a soft landing when entering new markets and allows you to build trust quickly in new places.” Job van der Voort, CEO and co-founder of Remote
Competitive advantage
Entering a market ahead of rivals is an effective way to establish brand awareness and credibility. By being first, you can secure a meaningful competitive advantage in your sector.
Even as a small or mid-sized business, you can make a significant impact if your product or service fits the market.
Market protection
A global presence lets you take advantage of different market trends and customer preferences, diversifying revenue streams and reducing exposure to localised shifts.
Operating in multiple markets also diminishes the effect of regional downturns. For instance, a recession in one country can be balanced by stronger performance elsewhere.
This helps preserve the overall stability of your business even during difficult macroeconomic periods.
Customer support coverage
If you have a meaningful customer base in a region — or customers who speak a particular language — expansion lets you meet their needs more effectively.
You can recruit customer support specialists with local language skills and cultural knowledge, delivering a smoother experience. This is scalable, enabling dedicated local CS teams in each market you enter.
Strategic partnerships and collaborations
Expanding globally provides a platform to form strategic international partnerships and collaborations that would otherwise be inaccessible.
These relationships can spur innovation and may open new markets or improve operational efficiency through knowledge and technology transfer.
What are the challenges of international expansion?
International expansion brings many advantages but, understandably, it is not a straightforward process. Even in favorable conditions, success is not guaranteed — irrespective of sector or company size.
The data underlines this: companies expanding overseas average a return on assets (ROA) of -1% for up to five years. In fact, only 40% of companies achieve an ROA of 3% or more.
This is why recognising common pitfalls in global expansion — and how to address them — is essential. Below are key challenges you are likely to encounter.
Local legislation and regulations
Failing to comply with local employment and tax laws can lead to fines, legal action and even restrictions on trading. This is challenging even in your home country; untangling foreign legal systems can be complex, time-consuming and frustrating — particularly when regulations change frequently.
That is why working with an experienced global HR partner is advisable. Remote helps ensure compliance with labour and tax laws wherever you hire, allowing you to focus on running and growing your business.
“Remote provides all the local compliance and regulatory knowledge for each specific country in-house. Without them, we would have to hire an additional 3 or 4 people to be able to cover all the local labor laws, taxes, accounting, translation, and payroll responsibilities.” Mona Walther, Senior People Operations Manager at commercetools
See our Country Explorer tool for available countries and roadmaps.
Market differences
Many firms err by simply duplicating what has worked domestically. Entering foreign markets requires a deeper grasp of local dynamics, consumer preferences and cultural subtleties.
For instance, numerous fintech firms are expanding internationally. These companies often concentrate on engineering and product work.
Yet they may lack experience in crafting cross-border go-to-market (GTM) plans or in choosing suitable campaigns, channels and messaging. That is why it is important to hire the right people who understand your new market well.
Cultural differences
Cultural differences affect communication styles, negotiation approaches and employee management. Lack of cross-cultural awareness can cause misunderstandings, strained relationships and potential failure.
Hence, hiring staff local to the market is recommended. Local employees bring deep cultural knowledge and can offer genuinely valuable insights. They also provide access to networks that ease navigation of the local business environment.
Competition in foreign markets
Overseas markets can be highly competitive, with local and international firms competing for share. Knowing the competitive landscape and differentiating yourself is vital.
Global competition has intensified in recent years, making a clear competitive strategy essential when expanding internationally.
Time and money
International expansion can require substantial upfront investment, such as:
Legal and regulatory compliance
Establishing local operations
Developing distribution networks
Additionally, you may need to invest time and funds in building local partnerships and recruiting and training a local workforce.
These costs can accumulate. For example, forming legal entities can take up to 12 months and exceed $100,000 per location, depending on local requirements and ongoing administration.
To avoid these burdens, consider working with an expansion partner such as Remote. With our EOR services, you can hire across many countries without setting up a single entity — and be operational within days.
To learn more about how an EOR operates, read our detailed guide.
Logistical issues
Depending on your offering, logistical hurdles — including transport, supply chain management and customs rules — can be major barriers. Moving goods and resources across borders requires careful planning and coordination to maintain efficiency.
To deliver products and services to customers you need a dependable distribution network and resilient infrastructure.
Banking and currencies
Expanding internationally generally means managing multiple currencies, banking systems and financial regulations. You must handle foreign exchange risk, establish banking relationships and navigate cross-border payment systems.
You also need to determine how to pay employees and contractors in new countries. Remote can simplify this via our EOR, centralised payroll or contractor management services.
How to pay your global employees
Global Payroll How to pay international employees
Data regulations
Data regulations are a complex part of international operations. They vary by country and can affect how you manage and store data across borders.
It is therefore essential to keep abreast of current data rules and requirements to reduce compliance risk and protect your business.
Data security for distributed teams
Data Security & IP [Webinar Recording] IP protection and data security for distributed teams
IP protections
On entering new markets, it is important to safeguard your products, ideas and branding. Securing patents, trademarks and copyrights where applicable is crucial.
You should also implement measures to prevent IP theft or copying, in line with local laws. If disputes arise, you need to know how to address them in local courts.
Remote can help you protect your IP when working with employees and contractors abroad.
Cybersecurity breaches
Cyber and data breaches are widespread globally, and the consequences can be severe. IBM reports the average cost of a data breach in the US in 2022 was $9.5 million.
Protecting your business from cyber threats and data leaks is challenging, especially when expanding internationally. Different regions have varying data protection rules that you must keep up with.
Transferring data across borders carries risk, and securing remote employees and their devices is a significant task. Home-based staff may use personal devices, further increasing vulnerability.
Consequently, ensure employees are trained in online safety and adopt up-to-date tools and practices to strengthen your cyber defences.
If you choose a global HR partner, confirm its security standards. Remote, for example, employs enterprise-grade data protection and security protocols, with a dedicated security team available to assist. Learn more about Remote’s security protocols.
What are the key steps in international expansion?
Now that you understand the benefits and risks of international expansion, what does a practical expansion plan involve?
As discussed, international expansion is more than planting a flag. It requires understanding diverse markets, leveraging local relationships and navigating cultural and regulatory subtleties.
Below is an outline of the stages you might follow — and how Remote can assist.
This may seem obvious, but allocate time to fully understand the target market’s dynamics. Analyse data, perform assessments and gain a clear picture of consumer behaviour and preferences.
Examine market trends and estimate growth prospects for your company. Consider macroeconomic and demographic factors.
Be mindful of potential entry barriers such as cultural differences, language obstacles and regulatory limits. Identifying challenges early lets you find mitigation strategies — or reassess whether to enter the market. Determine your mode of entry by weighing your resources and risk tolerance. Each route — exporting, licensing, merging or direct investment — has its own pros and cons, so decide on your acceptable risk/reward balance.
For instance, exporting may be lower risk but offer less market control. Licensing can provide fast market access but may create challenges in quality control or brand protection. Ensure you document your plan formally.
After research and selecting an entry approach, draft an expansion plan. This should serve as a roadmap and address several areas, including a:
Financial plan : Assess your budget for market entry and ongoing operating costs. Account for currency exchange rates and possible financing options that could affect capital structure and cash flow.
Set achievable revenue and profit forecasts based on market research and multiple scenarios — optimistic and pessimistic.
Risk assessment: International business carries risks from political instability to cultural and regulatory challenges. Conduct a thorough assessment to gauge likelihood and impact, and consider effects on operations, finances and reputation.
Once risks are identified, prepare strategies to mitigate or manage them. Contingency plans will help your business continue or recover quickly from unforeseen events. With robust risk management in place, your expansion strategy will be resilient and adaptable.
Infrastructure and logistics plan: Consider infrastructure and logistics, both physical and digital.
This may include mapping your supply chain — logistics and transport — to ensure smooth operations for all stakeholders.
This stage covers preparation for market entry and may include:
Securing final funding
Preparing your digital and/or physical infrastructure
As noted, understanding legal and regulatory requirements in the new market is vital to avoid fines, penalties and reputational harm. This includes employment law, IP rules, tax and accounting obligations, and entity formation requirements.
You could hire local lawyers and tax specialists, but that is time-consuming and costly. It is quicker and more economical to work with an EOR such as Remote, which handles much of the legal burden at a fraction of the cost.
This enables you to begin recruiting the people who will drive your expansion within days.
This phase is when you establish a practical presence in the new market. It may involve opening a local office or hiring local staff and ensuring on-the-ground resources are available for effective operations.
During this stage, you will also begin executing your marketing plan to raise brand awareness and attract customers.
Once operational, the emphasis shifts to scaling and expanding your customer base. This involves ongoing marketing, customer acquisition and retention efforts, focusing on performance metrics and return on investment (ROI).
At this stage, your business will have an established market presence. The focus moves to continual operational improvements and refining products or services based on customer feedback and market changes. This period demands ongoing effort to remain competitive and relevant.
HR considerations when expanding internationally
Building your team
Arguably the most critical factor in whether your expansion succeeds is your people.
“We know that the success or failure of our company is 99% down to our people. So being able to attract and then retain the best talent is vital to our success."
-Antonio Arias, Chief People Officer of QuoIntelligence
Recruiting in a new market is challenging. You must understand local workforce expectations and culture, including pay and benefits, alongside employment law differences such as minimum wage, overtime and working hours.
With Remote, you need not worry. Our integrated platform supports every stage of the cycle, allowing you to concentrate on running your business. Here’s how we help:
Recruitment
The first task is finding suitable candidates. There are many channels to assist, including local job boards, social networks and referrals.
You can also use Remote Talent to help fill difficult roles, with our remote jobs board providing global reach.
Through our EOR, you can also offer the best local benefits, aiding attraction of top candidates.
Hiring
Once you have extended an offer, you can employ the candidate swiftly via our EOR service or, if they are contractors, via our Contractor Management service.
This is useful when entering a new market, as it lets you “test the waters” with contractors before committing fully. You can convert contractors to employees easily with us, helping to avoid misclassification of your staff.
“Companies increasingly recognise the value of skilled freelancers who can contribute on a project basis, providing expertise without long-term commitment. This trend is not confined to Western countries but is becoming common in developing economies as well.”
-Pedro Barros, Senior VP and GM for Contractors at Remote
Onboarding
Onboarding is one of the most sensitive sequences of a new hire’s lifecycle. A poor experience may make the hire question their decision and lead to disengagement.
When you hire via Remote’s EOR, new hires receive a personalised welcome and step-by-step guidance through onboarding. We ensure the process is quick, simple and compliant, and assign a dedicated HR manager to each new employee.
This support extends to contractors. We ensure compliance and provide the same expert guidance throughout.
"With Remote, onboarding contractors is seamless: it literally takes seconds to add new people to the platform, issue their contracts, and request the ID documents necessary for them to get started."
- Erik Sveen, Founder and CEO of HomeProject
Payment
Paying employees and contractors can be secure, simple and fast. Wherever your workforce is based, Remote streamlines payroll and lets you process payments in minutes.
If you use our EOR, payroll is integrated: we perform calculations, apply necessary deductions and pay staff on time. We also provide in-house support for payroll questions. Learn more about EOR payroll management.
If you choose to establish your own legal entity in the new market, we can also provide payroll as a standalone service. Learn more about Global Payroll.
You can also manage and pay contractor invoices with a few clicks — in multiple currencies. Learn more about paying independent contractors.
Managing team members
Managing the daily HR needs of your international team is straightforward with Remote. We offer a fully free HRIS, allowing you to consolidate your HR tools and manage everything centrally. Employees can self-serve tasks like time and attendance, expense claims and document handling.
"The HRIS platform is easy to use and everything is there right in front of us. It all comes together and we’re not having to update different sources. That helps us be more efficient, which is so important in a scale-up."
-Bas Moeyaert, Loop Earplugs
Scaling
The advantage of expanding with Remote is that there are no limits to your growth; our platform and services scale with you worldwide. As you increase headcount and enter more countries, there is no need to change provider or alter processes — a frequent issue with smaller local providers.
Whether recruiting, hiring, onboarding, paying or managing, we can manage every element of your global HR, from your first hire to your thousandth — and beyond.
Examples of successful international expansion
Remote has supported organisations of all sizes to expand internationally, including the following:
Loom
Loom, one of the largest video communications platforms globally, used Remote’s infrastructure to expand its team into multiple countries.
With exceptional 900% year-on-year growth in 2021, Loom relied on a global talent pool to meet demand. However, international hiring brought numerous complications.
With 15 employees across 11 countries, Loom’s HR team struggled to keep pace with local hiring rules. Creating international hubs and dedicated management was not feasible.
Remote provided coverage where Loom had international staff and entities, offering clear and fair costs through its EOR. This partnership enabled Loom to convert contractors to employees, giving legitimacy and an improved experience to its workforce.
As we continue to scale and go forward, we can now provide employees the opportunity to relocate through Remote and hire great candidates through Remote.
Loom has since gained access to a diverse talent pool while ensuring compliance with local laws. This has supported the company’s growth and improved the employee experience.
Primer
Primer, a prominent fintech firm, used Remote’s infrastructure and expertise to navigate the complexities of international hiring.
Recognising remote work’s potential, Primer aimed to access a global talent pool. Expanding across countries presented its own challenges.
Partnering with Remote gave Primer the tools to hire internationally, with Remote’s EOR providing transparent costs and compliance with local laws, allowing Primer to concentrate on innovating in fintech.
I wasn't confident with the other EORs that we use, which is a dangerous game, because that puts more stress and pressure on our team to provide the follow-up. One of the biggest things Remote did was create this environment where you became an extension of our team, really followed up and overcommunicated in a lot of ways. That was vital for us, because it alleviated some of that responsibility from our team internally. -Erin Potter, Head of People & Operations at Primer
Primer was also able to convert contractors into permanent staff, improving consistency and the employee experience. As a result, the company expanded across borders while maintaining a focus on employee satisfaction.
Read more about Primer’s story.
Seatti
Innovative technology firm Seatti partnered with Remote to transform its approach to global talent acquisition and management.
Like many companies, Seatti wanted to support international growth by hiring in new markets, but global employment complexities posed a challenge.
With Remote, what caught our eye is the fact that you have your own legal entities in so many countries around the world. A lot of other similar providers that we looked at often just did it through partnerships. I think the growth and traction of Remote probably also speaks for itself and gives a strong indication that you're doing a lot of things right. -Chris Bieri, Co-founder of Seatti
Remote’s EOR service ensured Seatti complied with local laws, enabling successful cross-border expansion and fostering innovation and diversity.
Read more about Seatti’s story.
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Expand internationally with Remote
As shown, international expansion offers many potential benefits but also a number of challenges.
Remote’s integrated global HR solution is designed to help you manage these challenges at every stage. We enable consolidation and growth in new markets by helping you hire, manage and pay local talent while ensuring compliance with changing labour and tax laws.
Whether you want to recruit one employee or contractor abroad, or hundreds across multiple countries, we offer everything you need in a single platform. Whenever you require assistance, our in-house local experts are on hand to help.
To learn more about our platform and how it can support your expansion, book a demo or speak to one of our friendly experts today.