The world wide web has become and important vehicle in delivering products, services and information, not matter what business you’re in. Having a web presence opens your business up to a much wider potential audience, and will likely result in some international attention, whether that is your intent or not. Anyone from any country can stumble on your website, so instead of simply telling them that you can’t ship to them or deal in their currency, why not find a way to capitalize on that audience and make your business accessible to them?
Here are a few things to consider when opening your business up to international customers.
Of course, one of the biggest ramifications to engaging in transactions with foreign customers and clients is that your business’s tax implications will change. You will not only have to pay domestic taxes, but also foreign taxes specific to each country you do business in. Before you expand to foreign markets, call on the expertise of an international tax consultant. They can help you determine how profitable your venture will be once taxes are considered, and will help you ensure you are filing your taxes correctly once you’ve made the leap to foreign markets. Seeking this kind of expertise is what will stop you from inadvertently committing tax violations that can compromise your business and your personal life, so it’s an absolutely vital step.
Processing Foreign Currency
Of course, even before you start dealing with international taxes, you will have to process those foreign transactions, which is inherently more complex than processing domestic transactions. There are different ways you can go about it. You can choose to only accept American dollars and put customers in the position of having to find a way to pay that way. There are third-party payment services that customers can use to exchange their own currency, however, those services can sometimes be costly and customers may spend more than they intend if they are unclear on exchange rates, so if you really want to grow your business in other countries, it’s probably best to set up a system for your customers to pay in their own currency.
Once you settle on a way to do this, make sure you work with your international tax consultant to make sure you are capturing all transactions and tracking appropriately for tax purposes. It will likely get too complicated for you to track all foreign transactions and their implications, yourself, so it’s important to have a system and expertise in place in advance so that you don’t inadvertently commit a tax violation.
If you are offering physical products, you will have to find a way to ship your goods across borders. This means finding a reliable service provider who you trust to carry out that service.
Of course there may be tax implications depending on how you choose to carry out your shipping. When claiming shipping expenses, make sure you’re clear on when you have paid a foreign entity as opposed to a domestic one, as that can affect your claims. Be sure to consult your international tax consultant as well on how to handle duty and cross-border fees.
Regional Marketing Differences
Finally, you may choose to no longer just passively accept the foreign customers who happen to come your way, and instead actively market in foreign markets. If that’s the case, then you will need to be aware of varying tastes and trends in various locations. What appeals to one market might not appeal to others, for cultural or practical reasons. You’re not going to push your line of parkas in a tropical country, and you might need to cater food offerings to local tastes. International marketing experts can help you make the best decisions to effectively grow your business overseas.
However you decide to conduct business in foreign markets—whether you’re just dipping your toe in and doing one-off transactions or assertively and actively marketing there—you must have sure you have explored all angles and are conducting your business legally and ethically. If you are unsure, rely on the support of experts. International tax consultants and other professionals who specialize in foreign business are an absolute asset, and can give you the peace of mind you need to focus on growing your business, at home and abroad.