Foreign shores hold greener pastures

Mumbai, January 09, 2013 – In a world of continuing economic uncertainty, firms that trade internationally are reporting significantly better revenues and profits than those businesses sticking to their domestic market.

In India, 70% of firms which export say they’ve increased profits over the last 12 months compared with just 48% of companies which only trade domestically.

But a variety of worries are stopping even more businesses from operating abroad. Building an image abroad, complicated foreign tax systems, property costs and paperwork, political instability and natural disasters such as flooding or earthquakes are real concerns preventing firms taking that big, and lucrative, step overseas.

And while South East Asia is the most profitable destination according to Indian business, the Middle East and Europe – despite all the continuing economic worries over the future of the Euro –are also seen as profitable markets.

Those are the main findings of the second Global Survey report on export from global workplace provider Regus which canvassed opinion from more than 20,000 senior business managers in over 90 countries around the world.

Key Findings and Statistics

  • In India, over the last 12 months 70% of companies trading internationally said profits had grown compared with just 48% of firms concentrating domestically

  • In the same period, 74% of companies which export said their revenues had grown compared with 56% of firms focused domestically

  • Four-fifths (80%) of firms says paperwork and property costs are the biggest obstacles to setting up a presence abroad
  • Risk management (38%) – including political risk and the possibilities of natural disaster such as earthquakes, typhoons or flooding – and building an image abroad (38%) follow
  • Managing local taxation and regulation also concerns over two thirds of respondents at 34%
  • Operational staff recruitment is also a significant issue for many firms

  • For Indian businesses, South East Asia is the most popular market with 41% of businesses rating it as most profitable. China (39%) and the Middle East (27%) are the second and third most popular with Europe (23%) next

“In India, which has overtaken China is export growth rates,[1] our survey really does show the benefit of overseas expansion,” says Mr. Madhusudan Thakur, Regional Vice-President, South Asia, Regus. “But it’s clear there are some big challenges facing companies who want to move abroad. Once that initial enthusiasm has worn off, companies find they’re bogged down with paperwork or red tape or have real difficulty establishing a physical presence in a foreign country. Business centres such as those run by Regus located in the country can be an answer as they provide flexible workspace, local business expertise and affordable administrative services, giving companies a local presence without the financial risk that has traditionally been associated with expansion abroad.”

[1] The Times of India, India beats China in export growth rate: WTO, 29th July 2012