There are many benefits and certain advantages to opening a business overseas. These include access to new markets and taking a product or service into an international market that may be more receptive than your domestic one. Of course, overseas countries may have fewer regulations or lower costs that are more favorable for business.
These opportunities can be quite lucrative once they are set up, but there are also challenges and potential pitfalls to avoid. Recognizing these issues early helps get your new business operation off on the right track.
Paying taxes
Running an international business can involve more complicated taxes issues since businesses. However, the company may qualify for foreign earned income exclusion (FEIE), which exempts some of earned income. Since Guam is a U.S. territory, taxes will be relatively straightforward, but they will be different and depend on the nature of the company’s work. Notable examples include a special privilege tax, which consists of a 30% levy.
Registering the business
Taxes are an important issue, but local regulations must also be addressed and followed. Guam also requires business owners to secure a license from its’ Department of Revenue and Taxation’s General Licensing and Registration Branch before officially launching the business.
Avoid needless fines and penalties
It is often best to work with a local firm experienced in launching businesses owned or partially owned by non-residents. This can help avoid seizures, fines and legal penalties. For example, one regulation requires businesses to report cash payments larger than $10,000 (either one cash transaction or several totaling that amount) from a single buyer.
The economic climate
Each country’s economy is different, even when they are a U.S. territory. Some countries have unstable economies or cultural issues that make it riskier to conduct business there. Guam would be on the safer end of the spectrum.
The language barrier
English is spoken throughout the island, particularly among businesspeople. However, Chamorro is the traditional language and could pose a communication issue with workers. Native-speaking guidance can help hit the right note with marketing or provide insight into the local marketplace. Addressing the market’s unique needs can be the difference between significant growth and losing money.
Other unique challenges
Things can change quickly in a foreign country. It may be a change in governments, a shift in cultural norms, natural disasters, or other unforeseen hurdles. So, working with business law professionals on the island is essential. They can help start-up entrepreneurs, international corporations, or anyone else to launch a new business endeavor successfully. They can also take the lead to protect business interests or if litigation becomes necessary.