Chancellor George Osborne has set ambitious targets for Britain’s export drive and is particularly keen to see more SMEs operating overseas, especially those higher growth markets beyond the Eurozone. According to leading accountants in London, the country’s entrepreneurs seem to be picking up the gauntlet in fine style with over a third of UK businesses expressing confidence that they will expand their international activity during the course of 2015.
Of course, accountants in London are well placed to advise on this subject since the city has a mercantile tradition that stretches back over centuries and has accumulated expertise that most foreign countries can only dream of. Lawyers, insurance brokers and accountants in London know only too well the benefits that can accrue to even the smallest business that takes those first bold steps towards overseas expansion.
Foreign Direct Investment (FDI) refers to that stage in a company’s overseas development, which lies immediately beyond straightforward exports or the provision of services to foreign clients. International accountants in London usually define it as that crossover point at which a business actually commits direct investment into one or more countries overseas. Although this tended in the past to mean the building of a plant or factory, modern firms of accountants in London take it to include even a modest sales or local design office.
Most SMEs start off their international operations by securing distributors in those countries, which they choose to target. However, those trade advisers and accountants in London who specialise in overseas trade and FDI say that there is no substitute for having your own people on the ground and that this can lead to a quantum leap in progress. In their experience it will pay an SME to start having their own people embedded in the host country who can gradually pick up knowledge of the local market at first hand. It can also lead to increased security with less risk of valuable know-how leaking from the company. Experienced accountants in London point out that FDI involving an overseas subsidiary also has the added advantage of enabling a business to circumvent protectionist trade measures and can also lead to qualification for valuable inward investment grants.
A first hand example of how FDI can transform overseas expansion has recently been cited by a leading firm of accountants in London who have an American client company that was previously exporting toys to Europe using a third-party distributor. Eventually it made the step up to managing the sales and importation functions itself and has subsequently witnessed enormous growth in sales to the continent.
There is much government and professional help available to UK SMEs who might be considering the move up to FDI in one or more overseas countries. The first step is to consider the regulatory framework in which they plan to operate and ascertain what local requirements need to be met. Secondly, it is essential to conduct thorough market research before committing significant expenditures. In this regard it is highly advantageous to consult professional accountants in London of which the larger, more established firms usually already have extensive experience and networks of contacts in major overseas markets.
If you would value assistance and advice from a leading firm of accountants in London with extensive experience of overseas markets and contacts in over 100 countries, why not contact H W Fisher’s inward investment team.