Benefits and advantages of investing in another country

To talk about the benefits and advantages of investing in another country, let’s begin explaining some reasons by which those foreign investments are done.

4 important things an investor seeks:

• Access to resources with the lowest cost possible compared to the cost of the same resource in their country.
• Extend the regions to offer the services and products, bearing in mind the country of destination and the neighbor countries.
• Increase the efficiency, to get the best quality-price margin.
• Locate and take advantage of the new strategic capabilities and new technology existent in the destination. This last point can also be treated in reverse, where we take advantage of the existing technologies in the original country to development them in the destination.

Starting from each of these points, we will have the following benefits and advantages of investing in another country.

Resources at low cost.

An investment is done to generate an income or capital augmentation, this means that the main focus is to lower the investment. Going from a stablished business in the country of origin, which resource used to generate profit has a high cost on that country, the access to that resource with a differential cost means an advantage. Having production subsidiaries of raw material in optimal places will also improve the quality we can get from it. It will also facilitate that we receive the raw materials with the specifications needed to make the most of them.

Expanding the business’ scope.

The natural growing of a chain stores in a country, is its expansion to another territories, to improve the quality of the brand and enter in other markets. Expanding the franchise localization will always represent an opportunity to raise the profit of the investments. There will be occasions to raise the number of investors in the destination, which, knowing the success of a brand in a country, will have interest in developing it in the destination’s country. More scope for a brand means more opportunities to sell will have the product.

Efficiency raise.

This goes hand in hand with cost reduction, the need to get a better margin quality/price or cost/benefit will always come for any business. This can happen with factors as high-level workforce at a lower cost comparing with the original country; lower rent costs; tributary benefits for generating employees, and more. Reducing the loss risk also means a raise in the efficiency and the cost/benefit relation. More than getting resources at a low cost, this point focuses in getting in a context that allows higher profits on the investment due to international agreements and treaties between both countries.

Use of technology or innovation.

There is two points of view.

1. Using the technology existent in the origin to make an investment in a field that will be considered as innovation in the destination country; it will mean a high positive profit being the company with access to that technology. It can be too as the implementation of a business model in another territory in which it hasn’t been used. This will allow to have an advantage in the market from that business model.
2. Using the technology or technologic development which is present in the destination country, but not on the origin. It can be useful in case there are lack of specific professionals in the original country, but there is more offer in the destination.

In any case, the ideal is to find that balance to have access or a higher profit.

Is the foreign investment worth it?

In brief, yes. An advantage in our business means a better performance, and better results. Focusing our resources efficiently, investing in what will improve the quality and cost/benefit balance is the ideal plan to make our business success in the current years.
We have analyzed 4 important points that explains how much worth is the foreign investment. Is wise to investigate about the legislation of the objective country and the investing opportunities too. The final decision depends on the field and the benefits that may give, along with the advantages, either obtaining the resources at a lower cost or with less procedures, or expanding the range and market share of the products and services offered by the brand.
In case you have in mind an investment plan, you can contact us through this link, we can assist you in all the steps to succeed in your future planifications.