Giving Life to your Foreign Subsidiary
Like love in springtime or birth, the creation of a foreign subsidiary to actualize the vision and potential of your company is an exciting and dynamic adventure, full of possibility. The reality, however, is that all
new relationships, regardless of their promise, come with extenuating complexities. Anticipation and preparation are essential to successfully creating and sustaining the lifecycle of a new presence in a foreign country.
How will your products or services translate into the cultural understanding and language of the new setting? What approach will work best in the destination country? Are you creating a branch, a separate but related company, or engaging in a partnership? With whom are you competing or cooperating and how? Are you following the right protocols to satisfy the country’s regulatory procedures, permits, and laws? What are corporate and personal tax implications for your employees? Are you familiar with the visa and other requirements necessary to get your workers on the ground and engaged as quickly and easily as possible?
Some countries, such as Japan, have an extended history of international cooperation in which following familiar pathways and precedents will be essential to success. Others, such as the UAE with its free trade zone, are seeking new and innovative relationships that will require culturally intelligent entrepreneurial expertise. Countries such as Switzerland, which are attractive for their stability and apparent ease of access, may have taxation requirements that require careful consideration. Are you engaging in a country such as Algeria, which requires a 51 percent ownership by an indigenous partner? Is your goal to open opportunities in new consumer markets or to create low cost product manufacturing?
These and many more questions attend every new venture and the latitude for trial and error for a new or expanded company presence in a foreign country is narrow. Blunders can be especially costly, if not fatal. It is essential to have a realistic step-by-step plan to address the components of establishing successful global relationships. A full assessment of the extent and risks of investment will be important. This should include a consideration of the lifecycle of your subsidiary, in which changing circumstances can determine whether your presence continues to be fully effective and valuable.
Our new msi white paper on The Stages of the Foreign Subsidiary Lifecycle, addresses the key components and considerations of establishing and sustaining your company’s foreign venture. With successful experience in over 190 countries and territories, msi provides knowledgeable and essential insight and expertise, as well as programs that can enable you to navigate your new environment while focusing successfully on your mission.