Expanding into a new territory has the potential to bring about varying degrees of culture shock, especially for western companies expanding into Asian, Latin American, or African markets. But for U.S. organizations considering a global expansion, breaking into Western European markets may not be too far of a cultural departure. Western European countries like Germany, the Netherlands, and the United Kingdom share similar cultural norms and economic environments with United States. Beyond the potential language barrier (the UK notwithstanding) and a love of football over American football, there are, of course, differences, however slight. Because of that, these countries are viable options for not only a first global expansion, but as a strategic entry point for expanding deeper into Europe down the road.
Western Europe Expansion Considerations
Expanding into Germany
Germany has earned its nickname as the economic engine of Europe—although its famous growth rate is predicted to dip slightly over the short term. Even still, this slight decline has more to do with external factors; the uncertainty surrounding Brexit, current trade tensions between the European Union and the United States, and rumblings of Italian instability make it difficult to say with certainty what will happen with its economy over the next few years—although it’s predicted that its economy will expand by about 1.6% in 2019. Still, Germany’s economy is the strongest among these three countries, and offers a number of unique global expansion opportunities unavailable elsewhere.
Expanding into The Netherlands
Similarly, the Netherlands is an excellent option for a first expansion into Western Europe; its economy is strong, its education system is one of the best in the world, and its local workforce is exceptionally skilled as a result. The Netherlands is a country with one of the highest per capita incomes in the world, and it has a talent pool of more than 17 million people from which expanding organizations may draw. Likewise, nearly one-third of adults between the ages of 25 and 64 hold some type of university degree, making nationals some of the world’s most-educated. The Netherlands is also famous for its ease of doing business, thanks largely to a strong ecosystem founded on innovation and education.
London (Still) Calling
While the United Kingdom is arguably the most culturally and economically similar to the United States, the potential outcomes of Brexit still loom over the UK—and much of Europe. To say that Brexit is a fluid situation is a bit of an understatement; in November of 2018, a lengthy Draft Withdrawal Agreement was finally approved by the Cabinet. The next day, Brexit Secretary Dominic Raab and several of his colleagues resigned their posts because of significant disagreements with the contents of the Agreement. Fast forward to December 2018, and the EU Commission announced a “no-deal” Contingency Action Plan regarding the UK leaving the European Union “in 100 days’ time.”
At this point, it’s very hard to say what is going to happen with Brexit as March 2019 draws closer. A so-called “No-Deal Brexit” could easily affect domestic and foreign businesses in the UK in a number of ways regarding taxes, trade, visas, borders, and more. But despite Brexit uncertainties, the UK is still an excellent option for organizations, particularly for those embarking on their first journey across international waters. Further, working with an International PEO (Professional Employer Organization) can help businesses navigate uncertainties, leaving leadership to remain focused on executing daily operations.
Establish Your European Presence with an Experienced Partner
Even with the cloud of Brexit hovering, Western Europe still has an exceptional amount to offer by way of an educated and skilled talent pool—making it a prime target for your first (or additional) global expansion destination—and partnering with the right International PEO can help make these advantages all the more tangible.
Velocity Global has helped hundreds of organizations expand not just into Western Europe, but across the globe—and we can do the same for your business, virtually anywhere. Our International PEO solution allows your organization to get up and running in your new market in as few as 48 hours—cutting costs up to 60% when compared to traditional entity establishment.
Ready to make moves and grow your global footprint? Let’s talk.