Clark Hoy | Sales Manager EMEA, CloudPay
The opportunity to globally expand marks a significant shift in the lifecycle of a company. It indicates a business model that’s working and a product/service that carries worldwide appeal. But even when all the signs point to global expansion, it’s not a decision that should be taken lightly. Where you expand, who you hire as a global workforce, and what that means for global payroll should all be taken into account.
Here are the top 10 countries for international expansion — and why...
United Kingdom - The UK tops the list as one of the best countries for expansion. Its GDP is worth $2.6 trillion and is steadily growing every year. They also offer strong worker protection and low corporate tax rates.
Canada - With a GDP of $1.6 trillion and an annual growth rate of 1.5%, Canada is a very prosperous country to expand into. Doing business in Canada is, incredibly lucrative for companies in the oil and gas industry.
Ireland - Expanding into Ireland has many benefits. Low taxes and a talented workforce make Ireland ideal for global expansion. It currently has a GDP of $330 billion and an annual GDP growth of 5.1%.
Japan - As Japan’s consumer influence continues to rise, the prospect of expanding here becomes an increasingly attractive proposition. Japan has one of the world’s strongest GDPs on this list at $4.9 trillion.
Germany - One of the best European countries to expand your business into. As a leader in exporting and home to a vast and skilled workforce, Germany provides a fertile market for overseas companies. What's more, is that is has a GDP of $3.6 trillion and an annual growth rate of 1.9%.
Singapore - Due to the benefits that Singapore enjoys, like political stability, a thriving economy, and a talented workforce, it is an excellent option for businesses looking to expand globally. It also has a $313 billion GDP and annual growth rate of 2%.
Switzerland - Switzerland easily makes the list as one of Europe's top countries for global expansion. The country's GDP is worth $679 billion and grows at 1.4% annually. Home to a skilled labor force and an unemployment rate of just 3.3%, it deserves a place at the top of every list.
New Zealand - This island country has a $211 billion GDP with 3.6% annual growth, and there are no taxes for capital gains, payroll, or Social Security for you to worry about. What’s not to love about that?
Mexico - Fast becoming a global expansion powerhouse, Mexico has free trade agreements with 46 countries and a GDP worth more than $1.1 trillion, with 2.3% annual growth.
Norway - This Nordic country has a GDP of $399 billion, with 1.1% projected GDP growth. Simple tax laws make it an easy choice for businesses just starting to explore the international market. Norway is also home to many technological advancements, making it the perfect location for business expansion.
How to manage a global workforce?
Now that you have a better idea of the options on the table, let's start answering some of the questions we're sure you have about international expansion, hiring from a larger talent pool, and what this means for your payroll.
At the moment, companies are going global at an extraordinary pace, and their capabilities are diversifying as a result. As a result, new countries, currencies, languages, and compliance regulations necessitate new technological and organizational advances. As you would expect, this expanding landscape requires an effective international business expansion strategy. Payroll and the insights gained from payroll data will assist your company in determining how to best become operational in this new market.
When considering how and where to expand, it's essential to understand the local rules and customs. Familiarize yourself with where your prospective employees live, the benefits they are entitled to, how much they will expect to get paid, and how often.
Furthermore, it is essential to obtain legal counsel so that you are well-versed in the local laws and regulations. This will provide you with up-to-date and reliable information regarding withholdings, tax, and deductions.
You can use all the data you gather on these subjects to give you a clearer picture of your operational expenses. It's not a one-size-fits-all approach, as you can imagine. Your findings will vary drastically from country to country.
You need to be aware of the many factors to create a successful global expansion strategy. Here are a few data points you will want to uncover in your initial research.
- Regulations governing employment, such as working hours and required rest breaks
- Compensation for overtime is subject to certain limitations.
- Pay for and entitlement to vacation and sick leave
- Compensation and holiday scheduling
- Determining whether a worker is an independent contractor or a full-time employee
- Maternity and paternity leave
- Termination processes
An essential part of global payroll is data protection and data privacy. There is zero room for complacency regarding data protection, yet it remains a difficult task. You don't want to be one of the companies making headlines for failing to protect their user's sensitive data.
There are a few ways you can make it less complicated. Moving data to the cloud, limiting who can access the data to only a few relevant individuals, and managing data from a central location are all excellent information-protection strategies you can employ.
One of the most significant challenges for companies trying to protect their international employees' data is understanding and complying with local data regulations. Data privacy laws are in place to instruct businesses on handling employees' banking information.
The rules in another country may not be the same as they are in yours.
Your employees trust you with their information and count on you to keep it secure. Not letting them down starts by understanding the local rules and the steps you need to seal their data in an airtight vault. Failure to comply can result in fines and security breaches in worst-case scenarios.
Partners for your global expansion
If you are looking for more information on global expansion and how to make your move a success, then CloudPay has you covered. Our resources center should be your first port of call and the team is also available to answer any questions.
Clark Hoy | Sales Manager EMEA, CloudPay