Research: Huge demand for companies to expand into new jurisdictions

• 72% of companies set to increase overseas operations by 2024
• Increased management complexities seen as the main barrier to growth for established multinationals already abroad
• 60% of respondents believe legal and tax complexities are a barrier to growth

Companies remain enthusiastic about consolidating their existing operations abroad and expanding into new jurisdictions, according to our new research.
We surveyed a global sample of 100 companies ranging from start-ups to mature multinationals about their expansion plans.

According to the findings, nearly one quarter (26%) of respondents cite the access to a local sales market as a key pull to new geographical markets, with a fifth (21%) listing access to a talented workforce.

However, for established multinationals that have already expanded into multiple markets, there are several key challenges they must face when considering setting up ventures in different countries. Over half (60%) of respondents said that legal and tax complexities are a barrier to growth, with over four in ten (42%) citing the challenge of executing a successful M&A strategy.

A third (33%) of respondents cited the difficulties of relocating existing operations to new geographic markets as another obstacle. The key challenge was viewed as increased management complexities, with 65% agreeing it would render the growth of existing operations difficult.

Evert Wind, Global Head of Corporate Client services says:
“There are untapped opportunities in many regions, with many business leaders having to weigh up the upsides to expansion with the practical complexities that accompany it. It is notable that a third (33%) of corporate clients would outsource financial administration, (i.e. payroll, HR and tax functions) and legal administration as part of their international expansion.

“With more and more companies of all sizes and life stages looking to set up overseas operations, careful management of functions is the key to ensuring success at the growth stage. We have seen organisations working with a local law firm or accountant that know the business, and the benefits that can bring. For instance, if financing M&A activity is viewed as a challenge to multinationals that have already expanded into multiple markets, working with specialist accounting and reporting providers will help relieve the burden, and ensure compliance. It’s a complex process, so making sure companies are confident in the way their growth plans are executed is key.”