Many businesses, stores and enterprises may be faced with such a decision. For many entrepreneurs, the decision to expand is not easy. It is usually not easy to transfer a business model that is based on its own national language to another country, and thus extend it. Problems start with linguistic understanding, which can become difficult. Especially if you don’t know the relevant foreign language.
As a managing director who wants to grow his business to generate higher sales, being able to communicate in English is paramount. English is a global language and can therefore be used as a substitute almost anywhere. In almost every country, English is one of the common languages and therefore it would be advisable to master at least this language. However, there are many other steps that need to be taken if you want to expand your business internationally.
taxes and registration
In Germany, you need to register your business, for example with a trade office, if you are starting a business. If you’ve started a business, you may want to familiarize yourself with the legal forms first, as each has advantages and disadvantages. The most popular legal form in Germany is GmbH. Almost every citizen in Germany knows this legal form, as there are many GmbH companies in Germany. GmbH means “Limited Liability Company”. If the company you are setting up is in Germany, taxes will apply.
This includes value-added tax, sales tax, and other taxes. If the company you are setting up is not based in Germany (EU or Germany), the money must be registered with the German tax office, even if the company is based abroad, and settled accordingly. In Germany, you sometimes have to pay taxes when you send money. Likewise, a tax return and tax payment are also necessary if you are expanding your business. All of this also applies when you are growing abroad.
The distinction between the EU and non-EU
In EU countries, you are exempt from charging VAT. So if a service or something similar is exchanged or performed between two European countries, then you do not have to pay VAT on it in such cases. The basic rule is that services must be taxed at the time the business is established.
However, for a country outside the EU, things get more difficult when it comes to tax law. There are many differences in tax systems, especially in countries outside the EU. Therefore, no uniform rules have been defined as to how and what an entrepreneur must take into account when wanting to operate abroad under tax law. In principle, however, the system itself is similar – but the amount and settlement of the tax part are very different.
Currencies are also different
Currency is also a topic that you should study intensively. What happens if you send an employee money overseas and only a fraction of the amount is received at the other end? It would be very annoying, wouldn’t it? In that case, you probably haven’t looked at the currencies. Every country that is not part of the EU has a currency other than the Euro.
Currencies also have different values, such as comparatively rupees and euros. The euro is worth much more and generates a relatively large number of rupees. If you use the currency converter, you may be surprised how many rupees you get for one euro. As a rough example, you should therefore know what the currency of the country you want to expand looks like. The currency may be higher or lower, respectively. So you always have to send the correct amount so that the same amount comes out on the other end – but in a different currency.
For example, unexpected price changes can be detrimental to your business. The value of the euro may also fall, causing financial losses that may be difficult to cover. Late payment is also unpleasant for partners, customers and contractors and should be avoided at all costs. As a manager, you should meet deadlines and, above all, be profitable. So, ignorance of currencies and exchange rates would be a huge failure in growing your business.
When you start a business based in Germany, whether you like it or not, you will be dealing with taxes. Taxes are fees that every citizen of Germany has to pay, and it is right, because ultimately the tax system makes sense and purpose (e.g. to cover the state budget). Knowledge of tax law is therefore essential when setting up a business that should even develop at best.
In every country that does not belong to the EU, there are other currencies that are also worth different amounts. In order not to make big mistakes when it comes to currencies, exchange rates and exchange rates, you should be familiar with taxes. Whether you are doing business in Germany or abroad: Tax law must be mastered as each tax system is different in countries outside the EU. Therefore, each country should be approached individually when it comes to tax law and legal regulations.
The information provided here does not constitute investment or financial advice. NEX24 does not provide buy and sell recommendations. Please do your own research and seek professional financial advice before making any decisions.