Doing Business outside the European Union (EU)
Managing a business or a company overseas in a foreign country has its ups and downs. As such, this matter requires careful consideration, market study and policy research. It is important to make a profit and compete favorably in a foreign country; however, this may be limited by several factors that are beyond the scope of the business or the company.
Conducting trade outside the EU is comparative to conducting free trade. There several benefits to be obtained from such trade. Low costs are to be reaped from such markets in terms of labor and materials acquisition and less bureaucratic market (Vitez, 2018). The company will enjoy such a freedom to expand into other territories. On the other hand, there are limitations with this kind of trade. It does not enjoy the large single market provided by a union such as the EU, also security of the company in such lands may be doubted.
Doing business within the EU is faced with several challenges. The financial crisis that has hit the EU has affected its market, Greece is yet to recover from the 2008 financial crisis while countries like Italy and Portugal are likely to follow suit. The financial crisis is an impediment to a successful business and is indicative of a terrible future for business prospects. Bureaucracy may limit business in EU (Schneider, 2016). A country like Brussels is notorious for its rigid bureaucracy this may limit business due to the rigid regulations and hierarchy established by such systems. Nationalistic movements are on the rise in the EU (Schneider, 2016). Parties claiming the right wing birthright are on the rise threatening withdrawal from any trade treaty entered upon with the EU. Such moves would limit the trade market of EU in the future.
However, business in EU may also be lucrative due to factors such as tightened cybercrime laws which guarantee data privacy, it offers the largest single trade market, and enforcement of stringent anti-corruption laws (Schneider, 2016). Nonetheless, the gains to be reaped from a business in EU is far outweighed by constraints that the business is to suffer. This makes trading outside the EU far much safer.
Overall, seeing the numerous impediments facing a company in the EU and the likelihood of escalation of these factors, one would consider setting up a company in other regions other than EU as their top priority. The company would trade freely of the EU stringent measures that almost make profit impossibility, enjoy lower costs and chances of growing into other regions.
References
Schneider, R. (2016). The 5 opportunities and challenges of doing business in Europe. Retrieved from http://www.startupoverseas.co.uk/news/the-5-opportunities-and-challenges-of-doing-business-in-europe.html
Vitez, O. (2018). Pros of Free Trade. Chron. Retrieved From http://smallbusiness.chron.com/pros-trade-3827.html