If you’re ready to expand your company globally, the first step is determining where your team will find the most success. When you begin asking, “Where should I expand my business globally?” your first thought may be to look to some of the world’s economic powerhouses. While these countries can be great options for your company, you should also consider countries with smaller yet thriving economies. We’re going to look at some newer countries for global expansion that have fallen under the radar due to the size of their economies. Discover why you may want to add these ten countries to your global expansion plans.
1. Singapore
The Republic of Singapore — a sovereign city-state — doesn’t have one of the world’s largest economies, but the significance of its place in the global economy is quite astounding when you consider its size. This small island in Southeast Asia is less than one-quarter the size of Rhode Island, the smallest state in the U.S. So, why has Singapore come to be a popular place for global expansion?
For one, Singapore’s market is very free with fewer regulations companies must follow to become established and remain legally compliant. Singapore ranks second globally on the ease of doing business index, and the local government has a consistent track record of pro-business policies.
Another reason to consider expanding into Singapore is the sheer amount of economic opportunity in this metropolitan center. Singapore’s position at the southern tip of the Malay Peninsula contributes to its status as a major center for world trade. Singapore has also rapidly become a world financial center.
2. Malaysia
The Southeast Asian nation of Malaysia is home to a diverse population of people with Malay, Indian, Chinese, and European cultural influences. Malaysia’s economy used to be dependent on the export of raw materials like tin and rubber, but today, it has become extremely diversified and is one of the strongest, fastest-growing economies in Southeast Asia. This rapid growth makes Malaysia one of the best unknown countries for businesses that are ready to expand. Its average annual GDP growth rate has remained 4.404 percent over the last decade.
Compared to other Southeast Asian countries, Malaysia has more advanced technology and knowledge-based industries, as well as a more highly educated labor force. Some of Malaysia’s main industries include electrical and electronics manufacturing, automotive manufacturing, and construction. It also has a growing defense industry.
While Malaysia ranks fairly high on the ease of doing business scale, a professional employment organization (PEO) in Malaysia can make it easier to remain compliant with Malaysian laws. A PEO, also known as an employer of record (EOR), also makes it possible to hire Malaysian employees without having to establish a business entity in the country.
3. Denmark
Denmark — the southernmost Scandinavian country — distinguishes itself by its frequent ranking as the least corrupt country in the world. Though Danish citizens pay high taxes for a host of government benefits, the Danish economy is far from socialist. It is a thriving market economy with an exceptionally high gross national product (GNP) per capita. This level of government integrity and economic prosperity makes Denmark one of the best countries for business.
The main industries in Denmark are trade, manufacturing, and service industries. Denmark is also home to industry-leading pharmaceutical, maritime shipping, and renewable energy firms, as well as a small but high-tech agricultural sector.
Establishing a business entity in Denmark is a smart move and a relatively easy one – you can open up a subsidiary in Denmark simply by incorporating online in a matter of hours, and it’s not necessary for your management team to be Danish residents. If your company is established anywhere in the European Union (EU), you may find it convenient that Denmark’s business laws fall in line with current EU legislation.
4. Sweden
The U.S. Department of State calls Sweden a “highly favorable investment destination” for companies based in the U.S. and other nations. Sweden is one of the best countries to open a business in because Sweden’s economy is open and competitive, and the country is home to a highly educated workforce. There are many thriving industries in Sweden, including communications, tourism, pharmaceuticals, and technology — especially IT, green tech, and transportation tech.
Sweden has exceptionally high tax rates for its workers, but companies enjoy relatively low corporate tax rates. Sweden is highly unionized, and the Swedish government has established policies for leave and benefits that are generous compared to other countries, so employers must be prepared to abide by these requirements.
Incorporating a business in Sweden is fairly simple and follows regulations similar to those in other EU countries. However, it can take months, which is why some companies looking to expand quickly partner with an EOR in Sweden. Using an EOR lessens the burden of navigating Sweden’s extensive employment laws.
5. Norway
Norway is the westernmost country in Scandinavia and, like its cousins Denmark and Sweden, boasts a thriving economy and a strong, honest central government. Like other Scandinavian workers, Norwegian employees enjoy generous benefits. While many companies may find that following Norway’s employment laws is complicated, the process of establishing a business in Norway is relatively easy, taking a minimum of just four days.
On the world stage, Norway has made a name for itself as a major exporter of oil. By the mid-1990s, it was second only to Saudi Arabia in this respect. Today, it remains one of the most significant oil exporters in the world, and oil and gas remain the greatest contributor to the Norwegian economy. Norway uses very little of its oil and gas to power its own country, relying instead on hydropower — now a major industry in Norway. The low cost of hydropower is an advantage for manufacturers, as energy-intensive production like aluminum processing is less costly in Norway than it is in many other countries.
With so much coastal land, Norway is home to significant seafood exports, which is the second largest industry in Norway followed by tourism.
6. Finland
Finland is not technically a Scandinavian country, but it is situated adjacent to Scandinavia and shares many of Denmark, Sweden, and Norway’s strengths. These countries are all considered Nordic. Finland’s economy is characterized mainly by free enterprise and private ownership, though there are certain sectors where the government plays a more prominent role.
Finland ranks fairly well as a country with business-friendly regulations. However, it is a highly unionized country, and if your company violates any collective bargaining agreements, you may end up in labor court. Relying on an EOR for global expansion in Finland will ensure your company is compliant with all of the country’s employment requirements for your new Finnish hires.
Far-and-away, the largest sector in Finland is the service sector. Around two-thirds of Finns work in this sector. The next biggest sector is manufacturing, which also employs a large number of Finnish workers. Some significant types of manufacturing in Finland include electronics design and production, industrial machinery, chemicals, and more. Historically, agriculture was important in the Finnish economy, but it has become increasingly less so.
7. Poland
Though Poland is a more obscure country for international businesses to expand to, this central European country is worth consideration. Poland struggled throughout much of the 20th century economically while it was under communist rule. However, in the 1990s, Poland transformed into a market-based democracy and began to flourish. In fact, Poland was the only country in Europe that did not go into recession during the global financial crisis of 2008-2009. The average GDP growth rate over the last decade has been 2.784 percent annually.
Some of Poland’s main industries include agriculture, energy — especially hard coal — tourism, and manufacturing. The manufacturing sector is primarily focused on automotive production, though other types of manufacturing are prevalent in Poland, including shipbuilding, chemicals, and electronics.
Poland does present some complexities for doing business, making it an especially good idea to enlist the help of an EOR in Poland, at least in the initial stages of your expansion into the country.
8. Luxembourg
Luxembourg is one of the smallest countries in the world and has a population of just 626,000. So, why did it make our list? Luxembourg is worth consideration because it has repeatedly ranked first on the Open for Business subranking of the Best Countries.
The factors that go into determining these rankings include bureaucracy, manufacturing costs, tax environment, level of corruption, and the transparency of government practices. Among other distinctions, Luxembourg is second in the world for its favorable tax environment and is first for the freedom it allows in trade across borders. While Luxembourg is certainly business-friendly, starting a business there is a rather drawn-out process, so it’s wise to use an EOR in Luxembourg if you want to start hiring employees quickly.
An interesting thing to note about Luxembourg is that nearly half the population does not have Luxembourgish nationality. It’s a very diverse country, small as it is, and is home to many workers from neighboring countries. Luxembourg’s biggest industry is banking, followed by steel, IT, tourism, and agriculture.
9. New Zealand
New Zealand — an island nation in the South Pacific Ocean, southeast of Australia — holds the top spot as the easiest country in the world in which to do business. You can start a business there in less than a day. There are also no taxes for social security, payroll, or capital gains. New Zealand has a stable government and economy that also make it a safe place to invest.
The ease and security of doing business in New Zealand make it one of the top unknown countries to expand businesses internationally. While New Zealand is a business-friendly country, it is easy to overlook since it is a relatively small economy on the world stage and has nine times the number of sheep as it does people. However, it is also home to a skilled yet affordable labor force.
Based on the huge quantity of sheep, it’s not surprising that New Zealand is the world’s largest exporter of dairy and sheep meat. Agriculture is, by far, New Zealand’s biggest industry, but that doesn’t mean the country is all agrarian. Growing infrastructure has made construction another major industry in New Zealand. Tourism is also a large contributor to the country’s GDP. No matter what industry you’re in, you may find a thriving place for your business in New Zealand.
10. Ireland
Several factors make Ireland one of the best small countries to expand your business. The Irish labor market is exceptionally well-educated and diverse. Ireland also happens to have the youngest population in the EU, meaning there are many young professionals eager to contribute to the workforce.
Ireland also stands out due to its rapid GDP growth rate. The economy collapsed in late 2008, which had many negative ramifications. Ireland eventually accepted a bailout from the EU, and its economy has made major strides ever since. Over the last decade, Ireland’s GDP has increased by an average of 5.447 percent every year.
Ireland’s main industries include pharmaceutical and medical technology, agriculture, software, information and communications technology, financial service, and export and trade. Ireland has a modestly high score on the ease of doing business scale, but there are enough regulations that businesses looking to expand into Ireland should consider using a global EOR with a presence in the country.
Globalization Partners Can Help Your Company Expand to These Countries and More
Understanding what countries are good for doing business is a positive first step. However, Globalization Partners understands that, even when you’re expanding into countries that are good for business, you will still have to navigate red tape. These legalities also require professional consultants to ensure you’re abiding by employment laws and handling payroll correctly.
With Globalization Partners, you can expand into 187 different countries where we already have a presence. We’ll serve as the Employer of Record for your employees so you don’t have to establish a legal entity in the country or handle the technicalities that may otherwise complicate your international expansion. Request a proposal online to learn more.