Understanding Guide

Expanding business over the borders.

Companies reaches a time when they feel that the local demand is fully saturated therefore opt for foreign investment. Expansion of business over borders is a goal of all institutions from banking industry to schools. Some time back countries were very harsh to foreign companies trying to set up branches. However currently many countries are passing laws and decrees to encourage more and more companies to settle in their country. This after discovering that foreign companies are beneficial to the country by-

The country will have more jobs opportunities. Businesses usually hire people who are close to its location. Hence the citizens will enjoy getting revenue from the foreign company.

Improvement of the infrastructure. It is evident that foreign company will understand public private partnership with the government and assist in the construction of roads and railways. The foreign company also pays fees and taxes to the government which will be invested in the economic growth and development of the country.

Provision of high quality goods and services. Such as by allowing a foreign school to settle the county get exposed to new curriculum. The citizens will get to learn new courses which were not initially offered by local institutions.

Legislation which have been passed to facilitate expansion of businesses into the country includes.

Statutes concerning with land and real properties. One mechanism used to discourage foreign investment was policy that they had to acquire land in the country. This was a major challenges as the locals may be reluctant to sell or lease their land to foreign companies. In addition the risk of acquiring land overseas is very high plus the company needs large amount of capital to finance the acquisition. Foreign governments have done away with this restriction and have agreed to let the company rent out either land or building to set up its business.

Elimination of the unnecessary long approval procedures. Non-resident companies in the past had to submits very many documents before they could get the registration certificate. Non-resident companies would abandon the prospects of investing in the country after discovering it would take them a long time to settle in. This strategy aim to entice more foreign companies into the country.

One aspect that foreign government has maintained and in some cases increased is the fees and taxes that the non-resident company is expected to pay. Fees and taxes imposed on foreign companies has been raised at a very high rate by the local governments. Foreign governments justify the high fees and taxes to creating a more conducive business environment.
Foreign government will at one point in time have to give in to the concerns raised by the high fees and taxes imposed on foreign companies.