Bringing Your Business To The World: Insights Into Overseas Expansion

In this post, we show you how your business can find opportunities on the international stage, together with insights from our panel of successful business owners and leading business experts.

While Singapore is a First World economy, there is a limit to the size of our domestic market. This means that at some point, many businesses will look to international opportunities to further their growth.

In looking to expand to overseas markets, there's bound to be many questions on your mind: What should you watch out for? What are some of the best practices and what are the pitfalls?

We're here to help you answer those questions and more. In this article, we shed light on the topic, with unique insights from our panel of successful business owners and leading subject matter experts. If you're ready to get started, let's jump in.

Look Before You Leap

There are two common ways of doing this. You can either set up your own overseas company or go the franchise route.

Setting up a company overseas requires knowledge of the intricacies in registering your business, performing banking transactions, and various laws in licencing, hiring, marketing and so on. Given the complexities, Enterprise Singapore’s SME Centres should be your first stop for business advisory, market research and business partner matching, which is provided to Singapore SMEs free-of-charge. Enterprise Singapore also frequently organises talks on international expansion, which are also great opportunities for networking.

Since no one knows the local market better than locals and those who have already gone there, many business owners set up joint ventures to improve their chances of succeeding. In doing so, you must ensure your interests are protected. Francis Chan, Deputy Head (Disputes) of Rajah & Tann Legal Basix Practice Group shared his expertise:

“If you’re partnering with another party overseas, you should formalise the partnership in writing. Taking into account the corporate vehicle for your venture, your agreements should include important terms such as the governing law, dispute resolution mechanism, and the assignment of rights to any intellectual property developed during your partnership.”

For details on how to safely navigate legal and regulatory minefields in overseas expansion, check out Francis’ article here.

Franchising

Another way of expanding overseas—that has grown in popularity in recent years—is franchising.

In a franchise relationship, you will assign another party rights to use your trademark, and to produce, market and distribute goods and services, amongst others.

Ms. Kellin Koh, founder of Gordon Max & Co., shared that franchising was instrumental in their business expansion: “We had many overseas customers telling us that our diamonds will be very popular in their country. The business opportunity is there, but it is impossible for us to set up so many shops by ourselves. So, we decided to franchise – this is how we manage to be in 9 countries.”

Money Matters

Be it setting up a production facility, a new distribution office or retail outlet, you likely will need a considerable amount of financial resources.

If you do not have excess funds to divert overseas, have a chat with your bank on leveraging the strength of your existing business to finance the new one.

Another thing you need to look into is making the actual transfer of funds to your overseas bank account. This can be done easily through Velocity, OCBC’s Internet banking platform, which offers 23 currencies to choose from. If the amount you are planning to transfer is a considerable amount, you can also call OCBC’s business banking hotline to enquire about preferential rates.

Rounding Things Up

With the size restrictions of Singapore’s domestic market, many businesses will need to look overseas to grow.

According to the SBF ASEAN Outlook Survey 2017/2018, the top 3 overseas markets that Singapore companies are interested to expand into are Indonesia, Malaysia and Vietnam. If this is where you are looking to go, you may be pleased to know that OCBC has a strong network in these countries to support you. Mr Roy Tan, Managing Director of Global Enterprise Banking at OCBC spoke of his experience in helping local companies make the leap overseas.

In short, going overseas is exciting but comes with its set of risks so you have to do your homework carefully. Know and reach out to the resources available to you, and you will find helping hands on the other side of the border.