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International business

How does a business go international?

Author: Leon Harris

Start-ups and other companies with an internationally viable product that have raise funds from investors generally need to scale up and expand internationally in order to exploit their potential to the full. Selling over the internet doesn’t always do it. Artificial intelligence (AI) may provide general advice, it but it still needs to be supplemented by human judgment. Here is our take.

Expansion Structure:

Opening an office in the US and other affluent countries generally helps – they employ local personnel who understand the local language and culture. This facilitates appropriate marketing and after-sales efforts that are not always possible remotely using online platforms or AI.

Other expansion factors:

How can an SME (small or medium enterprise) scale up and establish an international structure? 

Here is a list of practical things to include in your action plans.

  1. Subsidiary vs branch: 

Incorporating a local subsidiary company or opening a branch office have differing legal, tax and bank AML (anti money laundering) implications that need to be considered. In practice, subsidiary companies tend to be the simpler approach. But branches may limit tax on profit repatriation in some countries.

  1. Coordination: 

An international group needs to function in an efficient united fashion. Management personnel must be designated and able to coordinate it all. 

  1. Regular update conference calls: 

Unread emails and chats are not effective. Regular video-conference calls are needed. An agenda should be drawn up and circulated in advance. A meeting summary should be circulated within a day after the meeting, listing conclusions, while the meeting is fresh in the minds of its participants.

  1. Tax planning legally: 

Tax is a major expenditure in all onshore countries where customers are located. Legitimate tax planning is called for, to help avoid double taxation and utilize any tax incentives allowed by law. 

  1. E-commerce planning: 
  • In the early days of e-commerce, it was possible to pay little or no tax anywhere for a long time. The OECD and governments soon noticed the resulting shortfall in revenues. 
  • Now the VAT/sales tax and income tax side of e-commerce can be complicated for local and international suppliers, especially where online platforms and/or fulfillment houses are used. 
  • Taxability (“nexus”) criteria must be reviewed and steps taken to avoid double taxation – after all foreign sales tax or VAT cannot usually be credited against income tax in the home country.
  • Consistent planning is needed, automated tax efficient compliance must be instituted. B2B taxation is sometimes taxed less heavily than B2C. 
  • Direct drop shipments from manufacturers to customers may escape local income taxation, local warehouses may not. Unavoidable taxes may need to be passed on to customers. Everything must be checked.
  1. Supply chain management: 

Customers want to buy things without fuss. The supply chain needs careful management and monitoring.

  1. Treasury management: 

Multinational groups typically aim to pool cash and loans in order to get best banking terms and deploy cash efficiently.

  1. Tax compliance: 

Tax returns should be filed and tax paid in good time, to help address or head off tax audits.

  1. Legal compliance: 

Each country has its own legal system and requirements. In many countries there are federal and state/provincial laws. 

  1. AI versus personnel deployment: 

Can artificial intelligence release people for other things? Sometimes this may be possible.

  1. Intellectual property (IP) protection: 

Where possible, ensure that patents, copyrights and other forms of legal protection are in place for IP. Otherwise, piracy is possible and nobody will invest in a company with leaky IP. 

  1. Problem management: 

Problems happen. Group management must expect surprises. That includes protecting data adequately, having cash reserves and backing up all records on a regular basis.

  1. Performance monitoring internationally: 

Efficient teamwork must be seen to be happening at all times in all locations. Internal management systems play an important role in holding a group together.

  1. Everything else. 

The above comments are not exhaustive. 

Concluding remark:

Why not go international?

For more information:

© All rights reserved, 20.5.2026. 

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