Pitfalls in international business

Pitfalls in international business

Whether you’re going on holiday or have decided to do business abroad, good preparation is half the job. Foreign countries have different rules and laws on both business and cultural matters. This article offers you first aid for a number of pitfalls in international entrepreneurship.

Not taking cultural differences into account

Every country has its own language and customs that can differ from what you are used to. It is essential to have bothpersonal relationships and cultural knowledge when doing business in another country. This creates mutual trust and can result in a positive outcome for both parties. You don't get a second chance to make a first impression.

So make sure you know what the customs are.

In Germany, for example, it is customary to greet the most important person first and then complete the hierarchical ladder. A firm handshake is one way to make a good impression in America, while in Russia dress to impress applies.

Inadequate preparation

Good preparation seems obvious but is often underestimated. The key to any strategy is to set short- and long-term goals. Foreign companies generally act less quickly than Dutch companies. Your plans influence the work of all stakeholders.

Involve them in the process and explain what actions you are willing to take to achieve your goals.

Not thinking about product requirements and liability

Product requirements differ from country to country and it is therefore important to delve into this. Each country has its own legal language requirements for many product categories and there are guidelines for product safety.

Familiarize yourself with the legal affairs of the country in which you want to establish your business and ensure that important documents are available in multiple languages. It is important to know when you are liable so you can prepare for this and solve any problems that may arise.

Choosing an unreliable supplier or buyer

It's always important to know who you're doing business with. Preferably it will be with a reliable and good company. Checking for honesty is difficult, but not impossible.

The internet is a good source of information to determine if a company can be trusted or not. For example, pay attention to the reviews and contact options. If only a postal address or mobile phone number is mentioned, it comes across as less sincere, and a Yahoo or Hotmail email address is not considered business-like. If the internet is not enough, you can always contact the economic departments of Dutch embassies abroad.

Risk of non-payment of your invoice

Certainty is very important in international business. Payments are part of this. As an exporter you want certainty that you will be paid and as an importer you want to receive the delivery on time. A bank guarantee, for example, is a godsend.

If you sell products via the internet, pay close attention to the VAT consequences to avoid fines. If you exceed the threshold amounts, you will have to pay VAT in the EU country where the turnover was made. No VAT is due for goods exported to countries outside the EU.

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Good preparation is therefore important if you do not want to succumb to the pitfalls of international business.

Do you want to translate business documents, or do you need help with interviews? Contact us and our native speaking translators will get to work for you!

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