Making the move abroad can be exciting but also challenging. And this is especially true if you’re also setting up business as an expat.
Of course, many people have done it (including yours truly!) and there are wonderful benefits to living la vida trabajo abroad. But if this is something you’re planning on doing, it’s best to get the lowdown from those who’ve gone before.
As someone who’s navigated Spanish legal business structures and lived to tell the tale, there are 6 primary considerations I would advise anyone to take on board before establishing a biz as an expat.
1. Research local business rules and regulations
Look into the local business regulations to make sure you’re happy to comply with conventional rules and practices.
Don’t make assumptions based on your experience of business in your home country. The differences may seem small but they can end up making a major dent in your startup budget and your monthly or annual bottom line.
For example, what will it cost to incorporate? In the UK, this is a cost of £13. But in Spain it’ll set you back a whopping €3,000!
There can often be more than one type of incorporation. Make sure that you select the right structure – so you don’t end up with regrets and a non-recoverable business in the long run.
Investigate whether it will be easy to open a bank account and how likely is it that you could apply for a business loan if it came to that?
If you’re planning on working as a consultant or coach in a particular field, check out that your qualifications match the legal requirement in your new abode abroad.
Also, you may think you’re paying a lot of tax at home, but just how much tax – and how frequently – will you pay as a small business or freelancer in your newly adopted country? Are there any other hidden costs you need to become aware of, like insurance, pensions or other social security fees?
For example, another experience many solopreneurs are unprepared for here in Spain is the fact that they are obligated to pay up to €300 a month for Social Security –regardless of what they’re earning per month!
All of these questions are important to have answers to if only to ensure you have an idea of what you’re getting yourself into before you dive off the deep end and start forming your empire!
2. Go to the experts for tax advice
When you’re registering as a business or self-employed, it’s also worth it to engage an expert in the process if you can’t yet speak the lingo. Often there’s a mountain of paperwork to plough through, and, as is the case with Spain, your tax requirements are not just based on your business structure but on the line of work you’re in too. Confusing? Just a tad!
And if you need to pay regular VAT or tax returns, hiring a local accountant to do that each month or quarter, can shift a lot of time-consuming work from your schedule, giving you more time to work on building the actual business.
In addition, just because you’ve moved to a new country and are embarking on the Big Adventure, doesn’t mean you won’t still have some tax obligations back home. For example, American solopreneurs may still need to file a US State Tax Return.
3. Be aware of cultural differences
There may be certain practices, attitudes and etiquette that you need to learn before you blast your way into a new business culture. So do your homework, and don’t fall back on old stereotypes. For example, most workers in Spanish cities don’t take siestas and regardless of their long-believed casual relationship to work, they typically work more hours than their British counterparts!
Many American and British workers also see friendliness as equaling openness; They find it easy to talk about their personal lives with people they don’t really know. That means, small talk with the bank manager or their newly hired social media manager may include details about how they spent their weekend or the fact that their dog was recently sick.
But many cultures on the Continent are much more formal with folk they’ve yet to build a working – or any – relationship with. Still, their being reticent about sharing personal details doesn’t imply they’re unfriendly. They just don’t feel they know you well enough to chat with you about their experience of, say, having shingles!
4. Learn the language
Learning the language of your new country is another cultural hurdle that’s worth crossing. Not only will it give you insight into the specific customs and quirks of your current community (see above), but it’ll also make you more welcome if it looks like you’re making the effort – no matter how bad your accent is!
Of course, it’s particularly important to know the local language of your intended customer base is your adopted city or country. You’ll be able to build genuine relationships and increase loyalty with your customers much more effectively. Even just knowing the basics can open you up to a whole new network of people and potential clients.
Having a good grasp of the lingua franca also helps you to be in full control when it comes to your legal and financial responsibilities. You’ll be in a better position to understand your options when it comes to any kind of business-related advice you need.
Also – Google Translate really won’t cut it when you’re trying to decipher the four-page letter you’ve just received from the tax office.
5. Plug into expat networks
Moving abroad even without setting up a business as an expat, can be a lonely experience. That’s why it’s important to plug into various international groups and networks. Having others who are in the same boat as you to share your concerns, confusions, and gain great advice from, can take some of the stress from your shoulders.
And not only can these communities help you to find your business feet, but they can be great social outlets too; Living abroad shouldn’t be all work and no play!
And even while you likely have no regrets about your decision to move and set up a business, it’s still nice to chat with someone from “back home”. After all, who else can truly appreciate the pure joy of a packet of Hobnobs or the inherently British compulsion to have whole conversations about the weather?
6. Be patient
Finally, setting up a business, whether in your adopted country or the place you grew up in, is always going to come with a few challenges. The best approach is to expect that and be patient. As long as you’ve sourced appropriate support, and have an idea of what you need to do legally and otherwise, there’s nothing that says you won’t be able to make your dream happen.
As an expat business owner, I can tell you that there’ll be sighs and tears, and maybe even a few tantrums! But there’ll also be moments of deep satisfaction, and feelings of great personal pride when the business finally starts to come together.