If you run a small or medium-sized business, it is very important to consider your options carefully before doing business in a foreign country. The costs vary greatly depending on the structure you choose, and there are several tax and legal issues to consider.
Having the right organisational structure can have an impact in many ways. For example, you should decide whether each European branch will work autonomously or whether specific functions of the business will report to the UK business, for example the sales team. You may also prefer to have a HR manager in each country to deal with local staffing issues or to find a specialist organisation to help you with employment law in the countries concerned.
Choosing the right business structure
If you plan to expand your UK business into Europe and have identified the markets you would like to sell to, the next step is to decide on the best structure for your business. There are a number of options, including:
- reseller, agency or partnership agreement - this allows you to conduct business or sell goods via a local partner firm
- local office - this can represent your interests in the local market but is not legally registered to carry out certain business
- branch - a business registered in the local country but fully controlled from a headquarters in another country
- subsidiary - a separate legal entity that is fully incorporated in the host European Union (EU) country and provides the maximum legal control
For many businesses, finding a local reseller or partner is considerably cheaper than opening their own office. See working with partners in different countries.
Read more about choosing the right structure for doing business in Europe.
If you have bought, or merged with a European company, it's important that all staff feel involved in the change process.
There are recognised systems for managing change and its implementation - see business change implementation.