European Expansion from the USA – 4 Early Considerations

By July 18, 2016 December 1st, 2017 No Comments
European Expansion from the USA – 4 Early Considerations

There is definitely a natural inclination for high-growth organizations based in the USA to lean toward European expansion for their first stab at international business, and why not?  An educated workforce, general regional stability, proximity for travel access and distribution all make for desirable traits.  Not to mention rising population (north of 500 million people) and a $16 trillion GDP.  We simply hope to shed some light on alternative approaches and unique questions as you consider your strategy for European expansion.

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1. Consider outlying markets for talent

If your growth strategy is predicated on tech talent, consider the markets of eastern Europe. They provide an intriguing combination of an inexpensive but generally talented workforce in tech, which also is frequently overlooked.  Software developers in Poland, Romania, and Bulgaria for example, allow for strong tech talent at a fraction of the cost compared to their US counterparts.

2. Take a Lean approach to your European expansion

Once you have determined that Europe is the natural next step for your global growth, we advise to step lightly at first and approach the market with a lean philosophy – an approach we have outlined previously. Acting lean, especially in your European expansion, will provide you the dexterity necessary to cut the fat slowing you down, and the ability to move quickly into or out of a market depending on the success of your strategy.

3. Choosing The Vehicles & Co-Pilots

As you determine when and where to execute your grand European expansion, the choices of who to partner with and how to enter will be overwhelming. Here some of the common initial considerations:

  • What type of legal structure if any do I need?
  • What should be my approach to the human capital component?
  • What are the tax implications both in that foreign market and here at home?
  • What is my appetite for risk?
  • What if it doesn’t work out? What is my exit strategy? What will be my exit costs?

We don’t envy the many choices you have. We simply seek to support your efforts and will consult you along the way.

4. Do Your Homework

Take your time to chat with your international tax advisors, HR team, legal team, and sales team. When the time comes to expand into Europe with a lean approach take a look at the eBook or give us a call!

Velocity Global combines all of these philosophies and considerations into one efficient, flexible and compliant approach through our FSaaS model. We would love to hear about your European expansion plans and help you achieve global domination.