At a point in a business life cycle, business owners start seriously considering venturing abroad. Small domestic markets push enterprises to look beyond their shores — for other opportunities and bigger markets to tap on and bring in new streams of revenue. While the possibilities and the lure of making it on foreign land can be exciting, setting up shop overseas comes with a whole host of challenges.
What makes venturing abroad a challenge for SMEs?
Singapore’s industry leaders cite having limited access to resources and understanding of foreign environment required to operate as key obstacles. Resources need to be prioritised; adequate capital needs to be made available to hire talent and expand.
It is critical that businesses understand how their product service fits into the new market. Would they need to adapt their offerings to suit their new customers with different buyer profiles? In order to be well informed about the local landscape, finding a local team would be key to avoiding any faux pas involving cultural differences.
They act as the bridge between the headquarters and the new operation. Finding competent, reliable and strategic individuals you trust to oversee operations in foreign cities can be difficult and may require trial-and-error, time and effort.
It can also be difficult understanding complex local laws related to taxes, labour and law. To be able to thrive and successfully operate in these new environments, these are, however, essential.
Government initiatives boosting SME growth and expansion
Government agency, Enterprise Singapore, provides a couple of grants, schemes and resources that help SMEs find their footing when expanding overseas. The Internationalisation Finance Scheme (IFS) – Non-Recourse provides funding of up to S$50 million to qualifying mid-sized enterprises. Together with Participating Financial Institutions (PFIs), such as DBS Bank and OCBC Bank, the risk is shared. Take advantage of the partnership opportunities already set up by the government.
Through the International Co-Innovation Programme and the Global Innovation Alliance (GIA), connect your company to overseas business and technology communities in France, Germany, or Thailand. The GIA Acceleration Programmes will support scaling efforts and spur the growth of your enterprise — taking it to great heights.
Leveraging on Opal’s Multi-Currency Account
Venturing abroad would also have you dealing with foreign currencies on a frequent basis. Multi- currency accounts offered by banks have transfer fees for every transaction, set-up fees, maintenance fees and minimum daily balance requirements. Minor expenditures like these ones can eat into your profits, chipping away at capital that could have otherwise been spent on reinvesting back into the business.
Opal is a single account that provides multiple best-in-class financial solutions. Our Multi-Currency Account allows you to make effortless business transactions in up to 22 different currencies. This means you can receive and make payments in multiple currencies without being forced to absorb conversions costs when dealing with suppliers and customers. Starting with us is free and we do not require you to maintain any daily or monthly balances. We are transparent and do not impose any transaction fees.
Opal’s escrow solutions facilitate trust
For cross border dealings, business owners might have concerns about the credibility of their overseas service providers. Can they fulfil what they’ve promised? Opal’s escrow solutions allow payment to be held while the transaction is being completed or the goods are being prepared — sufficiently addressing any uncertainty. Opal acts as the third party, holding on to payment until products are delivered and deemed satisfactory. In this way, both you and the foreign merchant you’re dealing with are assured. Our escrow accounts are fully digital and are approximately a tenth of the price banks charge for a similar service.
Opal’s Cross-Border Money Transfer solutions
Opening a corporate multi-currency account with Opal also gives you access to our Cross-Border Money Transfer solutions. This allows you to transfer money safely and efficiently, while keeping costs low. Our FX rates are competitive and follow the mid-market exchange rate as closely as possible, so your cost-savings are high. We offer terms that are 40% cheaper than banks. You can make transactions in over 100 corridors, including Hong Kong Dollar (HKD), Swiss Francs (CHF) and Thai Baht (THB).
Springboard to success
Making the decision to expand your business overseas may require careful consideration and detailed planning. While there may be risks associated, potentially performing well and creating a global brand can make the investment a worthy one. Together with Opal’s all-in-one banking and payment platform and the grants and initiatives provided by the government, you are well positioned to succeed as you broaden your business horizons.