What You Should Know Before Opening a European Office

Author: 
Deirdre Moran, VP of Emerging Technologies, IDA Ireland

The advent of online sales has certainly upended the traditional model of selling high-tech products but doing business over the internet only goes so far. Ultimately, fast-growing U.S. companies will likely need on-the-ground sales teams planted in foreign geographies to expand revenues and support overseas customers – particularly if your sales are high touch, require extensive post-sales support or involve regulatory considerations.

A particularly attractive location is Europe, a large, compact, wealthy geography that is often the first stop after a successful domestic operation is well established. Ireland has become a popular destination for tech, medical and financial companies from the US who see access to talent and an established cadre of US companies a plus. However, launching in Europe is a whole new ballgame compared to simply expanding at home.

Europe is a very complex market with multiple languages, time zones, cultures and currencies. Added to that, the 28 countries in the EU have different laws, financial structures and tax situations, not to mention the all-important issue of how business friendly each country might be. American sales executives anticipating a move to Europe should refer to the following guidance before planting their flag in this potentially lucrative market.

The "Where" Question

Here are some key questions to answer before deciding on where to establish your overseas office:

  • Where are your peers, customers and partners located and why did they choose that place?
  • Is the talent pool of international workers in the location big enough to ease hiring?
  • Is the city easy to access?
  • Is the local community known for understanding both the U.S. work culture and ethic as well as the European way of doing business?
  • Will the location appeal to your potential workers, who will likely have diverse backgrounds?
  • What's the local work ethic and what are the customs, productivity levels and attitudes in your chosen location?
  • Will the location accommodate the inevitable scaling, in office space and personnel, as you grow?

Research the laws and regulations beforehand

Here's what you should know on the hiring end:

  • What are the country's immigration policies?
  • Will moving staff in from other locations, if needed, be allowed?

Beyond staffing issues, Europe's many countries have other regulations that must be understood. Here are some strategies related to costs, tax liabilities and the benefits of various locations that can help:

  • Speak to lawyers, tax advisors and bankers in your chosen locale to get a handle on the level of paperwork required to get up and running.
  • Make sure you understand the local financial scene because banking in Europe is very different than how it's handled in America and can be a major pain point for U.S. firms, including strict customer due diligence regulations.
  • Establish and then use a local network to meet the people who know how U.S. companies work and can assist you in complying with all the local red tape.
  • Research the taxes and related regulations in your chosen location and whether they are they likely to change.

 Finding the Right Talent

People are always the most important factor when expanding to a new location. Here are some tips that can help:

  • Talk to companies that have set up operations in the location you are assessing that have similar talent needs.
  • Visit your chosen city for a few days and meet with other companies there to see first-hand how they hire and scale teams.
  • Speak to local recruiters and use LinkedIn and Glassdoor.
  • Post some openings on jobs boards in your chosen geography to test the market.

Focus On that All-Important First Hire

It's particularly essential to choose the right people when seeding a new team in a new location. The first hire is instrumental to setting the tone, culture and success of the office. That person needs to get processes in place, will hire the initial team and deal with problems and issues as they come your way.

A helpful approach is to send a “landing team” that often consists of two or three senior sales, support and ops people who spend six to 24 months in the new office to help hire, onboard and train new employees. Their knowledge of company processes and culture as well as their relationships with HQ can make a real difference in the long term rapport and integration of the new office.

Don't Ignore Corporate Culture

Rather than letting the culture of your office develop organically, a more hands-on approach creates better results. Given the fact that your employees will likely have different backgrounds, try to overlay the HQ's culture while celebrating local diversity. Some proven techniques include:

  • Holding well-planned all-hands meetings
  • Bringing European team members to HQ to get tastes of the corporate culture
  • Flying in senior executives from the home office for regular visits.

For the most part, companies that have made the leap to Europe, without exception, always comment that once they verified the opportunity, they realize they should have made the move sooner! Leading companies such as Google, Facebook, HP, IBM, Intel and Microsoft, as well as earlier stage, high-growth companies such as Slack, Airbnb, New Relic, Looker and Zendesk, have expanded their global footprint to Ireland and ended up staying.

Deirdre Moran is vice president of emerging technologies at IDA Ireland. In this role, she works with high-growth emerging companies and startups to assist in exploring the opportunity of moving overseas to Ireland by providing information around the business environment, information on building business models, recruitment, finance, legal, tax, property selection, PR and infrastructure. If you are thinking of opening a new office overseas, contact Deirdre at deirdre.moran@ida.ie.