What are the challenges for entrepreneurs abroad in 2023?
Is there a good time to start a business abroad? Is it possible to create a new company abroad in 2023? You might think that one should wait for a favorable economic situation before starting a business. Just like hiring during a crisis or a recession, there is no right time for starting a business. In fact, the right time is up to you to decide. The year 2020 has seen a boom in business creation. From Japan to the United States, via France and New Zealand, new entrepreneurs have launched their own businesses. Some did it to earn their living, others to give meaning to their lives.
While this trend seems to be consistent and is expected to continue in 2023, the international context remains bleak, undermined by the war in Ukraine. There are other current or past conflicts, like the Tigray War in Ethiopia, that occurred between November 2020 and November 2022, but they have a lesser impact on the international economic context.
However, the political situation has a direct effect on entrepreneurial ventures abroad, and so has the economic environment. According to the World Bank, 2023 will be the year of the recession. Inflation will certainly be lower than in 2022 but will continue to cripple economies and incomes, with large disparities between countries. This is the context in which aspiring entrepreneurs will build their projects in 2023.
What are the best countries to do business in?
First stop, the United Arab Emirates! According to the Global Entrepreneurship Monitor (GEM), the country is a great place to start a business. Born more than 20 years ago from the collaboration between the American academy Babson College and London Business School, GEM measures the entrepreneurial activity of countries around the world. Its latest edition (23rd), published last year, ranks the UAE as the leading country for entrepreneurs.
With 6.8 points, the UAE outranks the USA by a wide margin. The United States only ranks 11th, with 5.3 points. The Netherlands is in 2nd place (6.3 points), and Finland 3rd with 6.2 points. Next in line are Saudi Arabia (4th), Lithuania (5th), Norway (6th), South Korea (7th), Switzerland (8th), Qatar (9th) and Spain (10th). To measure the attractiveness of countries, the Global Entrepreneurship Monitor compares economic data (national wealth level, economic situation, etc.), political data (political, legal, administrative system, etc.) and social data. For example, the GEM has taken into account the reaction of different governments to the health crisis. It also considered local people's relationship to entrepreneurship. When asked, " Is it easy to be an entrepreneur in my country?", more than 70% of respondents from UAE answered "yes". This is the highest score of any country surveyed. In contrast, only 34 percent of US respondents said yes.
The UAE's winning strategy
The United Arab Emirates is benefiting from its new strategy to welcome foreign investors and entrepreneurs. During COVID, the UAE had already positioned itself as the new land of welcome for expatriates, a safe land that boasted its management of the health crisis. The seductive operation was amplified by visas designed to facilitate the entry and installation of foreign entrepreneurs (green visa, golden visa, etc.). At the same time, the UAE has been easing up on certain practices, such as the purchase and consumption of alcohol. At the end of the day, the message is clear: the UAE is adapting to societal changes and opening up to other cultures. The country is, so to say, the new place to be for entrepreneurs.
It is worth mentioning that the UAE is one of the sponsors of GEM. The 2022 study was conducted using 2021 data, that is, before the war in Ukraine, the inflationary crisis, and the risks of a global recession. However, experts agree that the UAE is a prime location for entrepreneurship and professional networking. The very favorable visas for entrepreneurs, coupled with the generous tax policy (no or low corporate taxes), favor the setting up of companies and start-ups. Innovation, tech, beauty, fashion, and high-tech industry sectors are the most concerned.
What are the most promising businesses overseas?
You can do almost anything as an entrepreneur abroad, but what are the most promising sectors? Of course, it all depends on the country and your own entrepreneurial strategy. Is the business project a 100% commitment, or is it only part-time to supplement your income? Is it a sole proprietorship or a company? With a few employees or several dozen (or thousands)?
The promising sectors can be similar in many countries. These sectors are also in the spotlight for people looking for a job abroad. Unsurprisingly, consulting jobs remain at the top of the list. Business consultants are the most likely to generate the most revenue. Real estate continues to be a buoyant sector, even though the market is much less euphoric than in 2021-2022. The digital, communication and green energy sectors continue to be just as popular.
More tips for doing business abroad
Choosing the country, the sector, the legal form, and the visa are paramount for the success of any entrepreneurial endeavor abroad. Between the dream of a new life and its achievement, there are many questions. Here are some practical tips to help you prepare for your entrepreneurial project abroad.
How to choose your sector and your host country?
Some people have always dreamed of being their own boss and have trained for it. Others found their inspiration during COVID. Some already know what they don't want to do, but they aren't really sure about which sector they would like to work in. The first ones will have no trouble defining their project. They will move forward with passion and certainly have an idea of their host country. For others, expert guidance from Chambers of Commerce and Industry, Chambers of Trade and Crafts, and immigration consulting firms can help to clarify the situation. Channeling your ideas and structuring your project will determine its viability and, if so, in which country.
How to choose the proper legal form?
People often show interest in their organization's communication and legal status. And yet, these considerations come last, and everything starts with the financial plan. For prospective expat entrepreneurs, however, there's even an indispensable step to take beforehand: the visa. First and foremost, you need to ensure that life as an entrepreneur is possible in the host country. The issue of the visa must be considered in conjunction with the financial plan, which will determine the legal structure (whether or not you need start-up capital, equipment, services, energy expenses, whether you are a sole proprietor or have a partner and/or employees, etc.). It is also necessary to make sure that the chosen visa is compatible with the intended legal form of the business and that it will be possible to carry out the chosen activity. Once again, seeking professional advice from lawyers, business creation consultants in the target country, etc., will help you make the right choice.
Is it necessary to have experience in the field?
Yes, and at the same time, it all depends on the sector. Of course, you don't have to be a stylist yourself to open a boutique in Dubai. On the other hand, you will need to have the skills of a good business manager and show knowledge and experience in managerial, commercial, technical, and accounting tasks. Even if accountants, salespeople, and communication specialists are hired, expat entrepreneurs must have a minimum background in order to understand the functioning of their business. Conversely, the entrepreneur-craftsman or artist must master his trade. In general, he works alone or has a few assistants. Business consultants, web developers, wigmakers, or concept artists who are self-employed must, of course, practice their trade and show expertise and professionalism if they want to attract and keep clients.
How to create and develop your network abroad?
Networks should be created well before setting up shop in the host country. Chambers of Commerce and Industry, international professional networks, business forums, professional social networks and other conventions are all good means of networking. Former colleagues can also be approached, as well as informal networks. You don't necessarily have to look for contacts in your professional sphere. On the contrary, expanding your circle will create a positive emulation.
Is it necessary to speak your host country's language?
Yes! Even if English is the universal business language, it may not be the language of future clients or their network and may not be spoken on the street corner in your host country. Of course, you need to speak English, but it will be a dire mistake to ignore the local language, which is just as important. Much more than a communication tool, it caters mostly to integration. And it's best to learn your host country's language before moving. Even if they require the help of experts to unravel the administrative and legal jargon (which may seem a total mystery, sometimes even for bilinguals and native speakers), expat entrepreneurs have every reason to learn the language of their host country. Knowing it will give them more confidence and put them in a better position to start and develop a business.
Useful links:
International Chamber of Commerce
