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Avoid the Factors for international Business Failure – Know More

International business expansion can be the best decision any company ever made to increase its revenues and market share. Yes, international markets present tremendous opportunities and the prospect of taking your company into new international markets is exciting. There are many clear benefits as to why you should consider expanding now more than ever before, such as access to greater revenue opportunities, recognition as a global player and greater market share. The ultimate success of course comes as a result of careful planning, research, patience, dedication and more often than not, just plain good timing. Often it is the companies with clear goals, in-depth strategies and visibility to measure performance that eventually enjoy the taste of sweet success.

With the numerous benefits also come certain challenges, and before embarking on an international business expansion, it is best to seek proper guidance and counsel so as to avoid any number of the factors for international business failure:

Failing to track your finances

Once you’ve made the decision to enter into a new country, there is a lot that can be achieved with a relatively small cash outlay during the initial stages of implementation, like seeking out first customers and partners. As the expenditure on international expansion needs to be gradual and limited it is essential to pay strict attention to your finances, and keep careful records of all money coming in and going out. Many a times, new entrepreneurs burn through their startup capital before their cash flow is positive. This is often  a result of misconceptions about how international businesses operate. Anyone starting out must seek professional assistance and obtain the necessary advice before making any big expenditure.

Ineffectively managing competition & market conditions

In your home market, your range of products and services complement each other, but may be too broad as you expand overseas. For maximum efficiency and chances of success in the new market, you need to determine your core offering that best expresses your differentiator in the optimal niche market and focus on that alone. Customer loyalty doesn’t just happen — you have to earn it. Watch your competition and stay one step ahead of them. If you don’t take care of your customers, your competition will. The ability to recognize opportunities and be flexible enough to adapt is crucial to surviving and thriving.

Poor planning can derail your outsourcing venture. When you are looking at International business expansion you may not be fully in sync with local business regulations and laws. Not all markets are created equal, and when you take into account disposable income, unique regulations, competition, distribution channels and operating costs, you may be surprised at which countries you should be targeting. Planning ahead and taking a step-by-step approach can make that international move easier. It is prudent to enlist the services of professionals who know the steps necessary for safe international growth and how to minimize risk and expenditure, and ensure that you successfully steer through the new business terrain to fulfill your goals in the best cost-effective way possible.

From Nair & Co. Marketing Team
5 March 2014

 

The Human Network: HR Updates from Europe to Asia

France Redundancies: The DGT (General Directorate for Work) has stated that rules on collective redundancies must be complied within full. Collective redundancies in France require extensive workplace consultation and also give employees rights to guarantees like redeployment, training and outplacement assistance.

China Labor Disputes: As labor disputes continue to rise in this Asian powerhouse economy, companies are using an increasingly popular option of labor arbitration —the first non government labor dispute mediation center opened in Shanghai in February 2010.  Previously, arbitration was conducted only by government agencies and the courts, and outcomes were very unpredictable.

U.K. Data Protection: From April this year, the U.K. Information Commissioner is authorized to issue fines of up to GBP 500,000 for breaches of the Data Protection Act. Companies should take particular care over the distribution of unencrypted personal data, in particular loss of data carried in laptops and memory sticks.

Taiwan Overseas Workers: Under current regulations, overseas contract workers (OCWs) are regulated under a three-tier quota system. Positions in the lowest tier can currently utilize only up to 15% OCWs. The middle tier can utilize up to 18% OCWs.  The top tier, which includes jobs considered more risky or labor-intensive, can utilize up to 20% OCWs. New regulations, expected to come into effect July/August 2010, create a five-tier system of 10%, 15%, 20%, 25%, 35% categories. The move benefits companies facing labor shortages, especially in the electronics sector.

EU Transnational Workers: Companies based in the European Economic Area (EEA) who send employees to work in other EEA countries are facing new social security regulations since May 2010. In general, workers pay social security in the country they are employed in. The new provisions relate to employees working in two or more states. In this case authorities in the country where the employee is a resident determine, which country's Social Security legislation will apply.

Vyoma Nair

Co-founder, Nair & Co.

Posted: August 2010

 

Why Tax Havens Are A Bad Idea?

The drive against the use of tax havens and the secrecy they allow has widened. The Organization for Economic Cooperation and Development (OECD) as a whole has launched initiatives against tax havens. Countries involved are:
Australia, New Zealand, Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, Canada, United States, Japan, Korea, Brazil, Mexico
Having a tax haven in one’s legal structure increases reporting requirements and the likelihood of tax audits. There are also likely to be increased withholding requirements on remittances to the tax havens.
Tax Haven In Your Legal Structure?
Evaluate links and transactions with tax payments.
Consider whether they really fulfill an industrial commercial or other financial need.
If the links or transactions merely avoid tax and have no other commercial reality, take immediate corrective action.
Vyoma Nair
Co-founder, Nair & Co.
Posted: July 2010

 

France is Making Positive Moves Towards Attracting Employees

Whilst U.K. is getting used to the impending new marginal income tax rate of 50% for top earners with effect from April 6, 2010, it is refreshing to see France announcing positive steps to encourage the international movement of employees to its country.

The following is an excerpt provided from a report by Dali Bouzoraa, Technical Director, International Bureau of Fiscal Documentation (IBFD). -----"This  is included in the guidelines regarding expatriate tax. A concessional tax regime for expatriates seconded to France was introduced by Art. 121 the Law of 4 August 2008 on Modernization of the Economy. The regime broadly provides for an exemption of  (i) 30% with respect to employment income, and (ii) 50% with respect to investment income, capital gains and intellectual property proceeds, subject to conditions, for qualifying expatriates. Technical guidance on the application and interpretation of the concessional regime was released by the French Tax Administration in Guideline 5 K-2-09 of 04 August 2009." 

Lee Williams
Head of Expat Tax (U.K. office) Nair & Co.
Posted: September 2009

 

The Great Depression—Or not?

Pain breeds innovation.  When society experiences pain, innovators emerge with new ideas, concepts, policies, technologies and products focused on eradicating the pain and ensuring that it does not return.  The end result: society recovers from the pain in form and fashion much stronger than at the pain’s inception.  In other words, society evolves through pain and innovation. 

Today’s economic crisis is causing a great deal of pain.  Characterized by increasing levels of unemployment, downward spiraling currency valuations, increasing trade deficits, plummeting GDP growth and concerns about geopolitical stability, this pain is global.  As the global media and world leaders attempt to identify the causes behind the foregoing, two words appear consistently:  waste and greed.  Consistent with historical precedence, as society grapples with this economic crisis new business trends and innovations are emerging in response to the crisis.

First, globalization is establishing itself as a mainstay in modern business practice. While “going global” has been en vogue since 2001, its early lack of widespread acceptance by small and medium size businesses hindered its recognition as anything more than an ephemeral trend.  At the onset of this economic crisis, many critics argued that its global reach would cause many companies to contract global operations, thereby ending the trendiness of globalization.  To date, however, the economic downturn appears to have galvanized globalization. While large corporations fight to maintain global operations in recognition of the value created thereby, many small and mid-size businesses appear to be expanding globally amidst the crisis as a cost effective means to increase bottom lines and maintain competitive standing.  While globalization may have contributed to the widespread nature of the current economic crisis, society is betting that globalization will contribute to its recovery as well.

Second, sustainability is emerging as an integral component of any new initiative.  New businesses, business processes and technologies are not considered viable unless decision makers conclude they are sustainable.  Sustainability takes multiple meanings and forms.  In the energy context, it means renewable and takes the form of biofuels, wind, solar, nuclear or hydro.  In the urbanization context, it means long term growth/expansion with minimal social displacement and detrimental environmental consequences and takes the form of “green” development.  In the general business context, it means recession proof and cost effectiveness and takes the form of Zappos, Wal-Mart and the multitude of other businesses thriving during this economic downturn.  Society is unwilling to promote endeavors which may be compromised by a change in the wind’s direction.  

Third, social utility and impact are becoming norms rather than anomalies.  Ranging from new platforms fostering a stronger sense of community (e.g. Facebook, Twitter) to recent developments in alternative energy and healthcare, society’s sense of community appears to be growing stronger in response to the “community” wide economic crisis.  It almost appears as though society realizes that at end of the day, “all we have is each other.”  Through the promotion of socially utilitarian technologies and ventures, society is healing itself. 

Innovation is the engine of society’s evolution.  Accordingly, society should be the better for the economic downturn as a result of the innovation it inspired.

Nair & Co. 
Posted: (June 2009)

 

Hello Everyone and Welcome!

We are excited to launch our new blog as a way to establish direct communication with people interested in Nair & Co. This section features several of Nair & Co. leaders, who share their perspectives on the issues that our clients and our managers face today. The blog offers an “inside look” at Nair & Co. operations and provides opportunities to hear directly from the Nair & Co. experts who keep our business running and growing.

To foster a meaningful and constructive discussion, we follow these guiding principles:
• We provide unique, individual perspectives on what’s going on at Nair & Co. and in the world;
• We post commentary, except for spam and remarks that are off-topic, denigrating or offensive;
• We respect proprietary information and confidentiality; and
• We are respectful when disagreeing with others’ opinions.

We invite you to visit our blog regularly to read about what’s on the minds of Nair & Co. leaders. We are very excited that you have decided to check out the Nair & Co. blog.

The Team at Nair & Co.

Posted:  February 2009

 

Tracking the globe for challenges and opportunities of outsourcing

I recently presented to a group of entrepreneurs at the Council for Economic Development in North Carolina. The audience — an impressive turnout — was eager to understand the challenges of establishing an international operation and more importantly ways to tackle these challenges. Many executives had clearly experienced difficulties in the past and were eager to be well prepared for their next venture. Others had found useful ways to track global opportunities. Here are some of issues that came up in our discussion.

• The ability of the Sheikh’s in the United Arab Emirates (UAE) to change the rules of the game very quickly resulting in a lack of certainty over future operations.

• The usefulness of Ireland as an European Union (EU) profit center when providing professional services to companies throughout the EU.

• How  Eastern Europe can become a challenger to India and China given their well educated workforce, low cost base and stable political environments.

We also discussed the growing costs associated with operating in India and the difficulties of retaining Indian employees. More and more companies that I speak with express their frustration with the current employment climate in India. It is not uncommon for new hires to fail to turn up on their first day because they ‘got a better offer.’ An innovative solution that we suggest is to extend benefits to the employee’s household, which might include parents and grandparents. As a result the employee needs the consensus of his elders before deciding not to join or to leave the employment offer.

Nair & Co. Team
Posted: February 2009

 

     
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