Opening A Sister/Daughter Company Abroad

Expanding your business to reach out to a brand new audience can be an exciting challenge. For a lot of companies, opening a new office abroad is a growth milestone that can be tricky to manage. The first and most important question you need to answer is what kind of business you need. A subsidiary company that acts as a legal entity or a daughter company presents a tax advantage. On the other hand, you might prefer a sister company, which occupies a different niche from the parent company. Figuring out the best solution depends on your expansion model. However, regardless of whether you open a sister or a daughter company, you will need to tackle challenges that are inherent to the new market position.

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Finding experts who can help you to get started

First of all, your priority when reaching out to a new market abroad is to establish your knowledge of legal, financial, and administrative requirements necessary to start a company. Opening a new business in Dubai, for instance, is a smart move if you need to make the most of the UAE’s market. However, without experts such as How2uae, you may not understand how to form a company offshore or take advantage of the free zone system. The same principle applies to any new region you approach for your sister/daughter company. 


Outsourcing or hiring local talent?

It’s fair to say you can’t hit the ground running when you open a new business. However, you can ensure you’ve got the best talent to make a buzz. Your hiring strategy plays a significant role in the growth of your foreign company. Reviewing applications to find the best candidate is pointless if you don’t understand the job at hand. Unfortunately, if you’ve opted for a sister company, you can’t repurpose your existing hierarchy plan to the new business. You need to create a business plan that encompasses the activities of your sister company and its requirements. As a result, it’s not uncommon for entrepreneurs to outsource strategic decisions and HR planning during the first stages. 

Have you chosen the right location?

There’s no way you can expand internationally if you don’t understand the local market. Each new location responds to the needs of a specific market. Conducting useful international market research can be a lifesaver when you’re in the process of choosing the most suitable location for your business. It’s a good idea to target local competitors to understand the trends and threats. Additionally, you also should follow-up with a report on the logistic considerations, especially if you intend to maintain a link between the parent and sister/daughter companies. 


Understanding the local culture

Lastly, each market has its own culture. If you’re going to export your brand name, you should name whether that name translates into a foreign language, or whether it is a suitable choice for the local market. You wouldn’t want to find out that your brand name is an offensive word in the local lingua! 


Are you ready to move beyond the borders of your local market and open a daughter or sister company abroad? Going international is a challenge that can either boost or destroy your business. Therefore, it’s not a decision to take lightly. Understanding the local requirements and finding the best talent and support for your company abroad is a no-brainer to avoid costly issues. 


Lisa Besserman, Founder and CEO of Startup Buenos Aires, has been named as Business Insider’s “Top 100 Most Influential Women in Tech”, and the 2014 “Business Innovator of Latin America” by the Council of the Americas.

Lisa moved to Buenos Aires from New York City to create Startup Buenos Aires, the organization that represents the startup, tech and entrepreneurial community of Buenos Aires, Argentina.
Startup Buenos Aires has been one of the main catalysts for strengthening the tech ecosystem in Latin America, by bringing global startup initiatives, development projects and investment opportunities to the region.
Under Lisa’s leadership Startup Buenos Aires has been credited as “Top 3 Growing Startup Cities” by CNBC and “5 Emerging Global Tech Hubs” by Entrepreneur Magazine.

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