Due to new technologies and the digitization boom, having a business operating in another country without the need to have a physical office or hired workers is more feasible every day.
Luis Fuentes, a lawyer at Estudio Fuentes, a specialist in business and finance, considers that if a successful company presents limitations in its growth, due to demographics, it should consider expanding to other countries, since the markets present this type of difficulty.
In this sense, the expert shares some tips that Peruvian companies can take into account if they choose to internationalize.
- Continue in the same category: To take the step of internationalization, the company must present a high profitability in the Peruvian market so that it can replicate the business model in another country. “The big mistake occurs when the company wants to cover a new area in another country, since they are going to lose all the knowledge they have acquired and start from scratch,” said Fuentes.
- Nearby markets: Most companies prefer to expand in nearby countries, as these markets have a greater chance of success. For example, Chile, Colombia and Mexico are the most chosen countries because the same language is used and the tax scheme is similar. As the next level, companies then migrate to the US.
- Representation: Companies must have a representative in the country in which they wish to internationalize. To do this, they have three options. First, send someone from Peru. Second, hire a resident of the new country. Finally, hire a law firm that performs the functions of representation and also provides your address in that country.
- Investment: The cost required to expand to another country varies according to the type of company. Many believe that it can be a very expensive process, however, the operation can be managed remotely from the country of origin. If a law firm is hired, the expansion can start without staff or an office. The initial investment can be from US$3,000 and the maintenance can demand from about US$500 per month depending on the support needed.
