In Europe overall, the picture is not rosy. Cyprus is the latest euro-zone country to receive full bail-out after Greece, Ireland and Portugal, while Spain received partial bail-out for its banking sector. Economists listed a range of economic problems in Europe, including excessive regulation, rigid labour markets, inefficient public sectors, large and overleveraged banks, and bad loans. Unfortunately, the Eurozone crisis is likely to remain for several years. If you are facing a saturated domestic market, you might want to consider expanding your business further afield.
Going global may be a natural extension of your globalisation strategy to enhance your brand value, increase your market share, seek tax incentives, or diversify your business in another region. You might want to locate to places with low labour costs, or to developing and emerging markets. Some emerging markets include Egypt in the Middle East and North Africa (MENA) and Brazil, India, Russia, China and South Africa (known as the BRICS). Here we will look at the opportunities for investments in these markets and discuss some challenges of starting a business overseas, using Egypt as a case study.
Egypt is the most populous country in the Arab world, with a population of 91 million, and it is also one of the largest economies in the MENA region. Before expanding your business to Egypt, you can obtain advice and assistance from the UK Trade and Investment (UKTI) Department. The UKTI has identified numerous investment opportunities in a range of sectors in Egypt, including education and training, engineering, oil & gas and information technology.
What do you need to know about starting a business in Egypt? You should expect to adjust your market strategy and adapt your product or packaging to suit the local market. For instance, you may need to change your product’s name or logo. You may even need to use a bilingual label by translating the labels and instructions into Arabic alongside the English. You or your sales person may need to learn basic Arabic. Opening a business bank account in Egypt is a necessity if you are trading and transacting in the Egyptian pound. It is also a good idea to open a business bank account in order to separate your personal assets from the company’s money or distinguish revenues and expenses between local and foreign entities. Furthermore, you must keep fully abreast of the customs, cultures and etiquette of doing business in Egypt. For example, when Muslims greet each other, they say “Assalamo Alaikum” rather than “good morning” or “hello”.
The BRICS countries account for 43% of the world’s population, 25% of the world’s land mass and have combined foreign-currency reserves of $4.4 trillion. As reported in The Guardian, trade in BRICS countries is predicted to reach $500bn by 2015, with China-Africa trade making up 60% of that total. Bloomberg reported that during an annual summit held in the eastern South African city of Durban in March 2013, BRICS plan to establish a new development bank. Hence, these fast-growing emerging markets hold incredible promise for growth.
Overall anyone looking to expand should do careful research in advance, spend some time in your country of choice and understand how business is conducted in order to optimise your chances of success.