Expanding business over the borders.
Businesses nowadays are tapping into the international market by setting up branches worldwide. This move is being taken by all players in an economy from education institutions such as universities to financial services companies such as banks. In the past this move was welcomed with a lot of hostility by the destination country making set up business or institution very difficult. Governments this days have considered and agreed to allow foreign companies to expand into their countries. 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. Thus the country resident will get employed and earn their wages and salaries from the business.
Innovation on the infrastructure. It is usual for companies expanding to other countries to have an agreement with the local government that they will offer assistance in developing the infrastructure. Also the government will expand its sources of income by having the non-resident company pay fees and taxes.
Creation of supply of new goods and services. Such as by allowing a foreign school to settle the county get exposed to new curriculum. Therefore residents are able to acquire skills which there had to travel abroad to learn locally.
Some of the laws being passed to encourage foreign investment involves.
The law relating to ownership of land. Some countries had very strict conditions that a business had to own a piece of land in order to operate 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. To encourage businesses countries have removed this law and allowed foreign companies to rent properties to use for their operations.
Foreign governments are doing away with the many bureaucratic rules and regulations to non-resident companies. Non-resident companies in the past had to submits very many documents before they could get the registration certificate. Therefore making many companies be discouraged by the lengthy process. 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. Foreign governments have raised the minimum capital requirement for the non-resident companies. Non-residents are being advised that the high payment are compensation to the local government efforts of making it easy for them to expand.
There is a need for governments to rethink about the huge capital requirement on foreign companies.