The age of globalization is in full swing, with travel, business deals, and financial services moving across borders almost without hesitation.
Technology has had a major part in the ability to move between local and international economies, as internet connectivity and cloud-based operations have removed some of the limitations on communication and secure financial transactions. There are plenty of expansion opportunities in global markets, and U.S. citizens and companies are eager to jump in on the action.
There are many financial benefits to expanding your business overseas, but there are potential headaches as well if you are unprepared for international commerce.
Below you’ll get some tips on how to expand overseas, especially regarding how to choose a bank.
Doing Your Homework
Before you jump headfirst into a transition for global operations, do your research and make sure you are fully aware of what the changes will cost you.
It isn’t just about the financial pressure of sustaining a new venture, but you need to make sure your employees are on board with the growth opportunity and are qualified and capable of handling the changes or additional workload.
You also need to spend time looking at a specific region or country where you can deploy your products, and you need to make sure the local and international competition won’t stifle your opportunities.
Beyond that, you need to check on regulatory and tariff concerns. Just because you have an excellent product doesn’t mean red tape won’t stand in the way of getting it to the people.
Your venture may also require additional capital, especially if you plan to open a location or headquarters in the region. Rather than turning to your primary financier, you may want to consider exploring a financial partnership with a local bank that is located overseas in the country of operation.
For instance, GBTI Bank extends financial resources through investment assistance for those looking to enter the Guyana markets. There are several reasons why choosing a local bank overseas may be beneficial to your international activities.
When doing business overseas, it can be difficult to get your money back to a mainland bank without a lot of hassle. When you set up a local bank overseas, it can help ease some of the burdens.
Local banks make it easier in navigating currency exchanges and accepting purchases from the locals. Though not all of your transactions will be in a local currency, have a local bank to accept the cash and transfer funds stateside can open up consumer potential.
It also easier for you to send your employees financial backing that can be cashed out.
The old adage is that keeping your eggs in one basket isn’t a wise practice, and this could be said about financial resources. Though the U.S. financial system is sound, it doesn’t hurt to diversify your portfolio and move money overseas to balance out accounts.
When you operate a business in a foreign country, you have more buying power for local vendors when your money speaks their language.
Though you may be renting a property for your business extension, you can also pursue international investment opportunities when using a foreign bank.
There are a number of investment options that aren’t sold on traditional exchanges, and you can take advantage of property or equipment investments when you have access to quick cash and the opportunity opens up. While your prime reason for being in the country is to operate your business and explore growth, you can achieve both and still look for additional ways to boost your company’s revenue or portfolio.
Interest rates within the U.S. have been rather low over the past decade, which has made it difficult to yield a notable return on any savings account balances. Though not all countries will be able to offer a better return rate, there are some countries that seek out investors by offering higher interest rates.
Tips for Success
Before you settle on a financial institution for your international banking needs, do some additional research. Consider the country and the stability of the financial system. Look at the fee structures, the currency defaults for your savings, and any financial securities that might be offered.
Unlike banking in the United States, your funds won’t be guaranteed by FDIC safeguards. In a foreign bank, your money is on its own. This is why you should ask about and evaluate the financial safeguards established by either the institution itself or the host country.
It may be more beneficial to work with an international bank that has affiliates or branches that are located within the U.S., as there is a higher probability that the international exchanges will operate more seamlessly. Gather the necessary paperwork before attempting to navigate the application process, and make sure you only exchange sensitive information through secure channels.
Supporting the local economy might be a way to boost consumer loyalty if you are establishing an office overseas for your international export ventures. However, your personal and company’s finances are at stake, so work cautiously and take precautions to safeguard your investment.