Legal and regulatory issues are the most widely experienced barriers for both SMEs and larger companies, according to recent research.
One study of over 900 UK companies found that two in five exporters reported that they experienced this difficulty. A separate global study on high-growth markets in conjunction with the Economist Intelligence Unit (EIU) found that over half (51 per cent) of firms report unclear, bureaucratic regulations as the greatest government-related obstacle to their operations.
For example, in Brazil the 27-state federal structure makes for an extremely complex taxation system and its complexities mean it is not suitable for every company. Also, the EIU study found that companies reported the highest legal and regulatory barriers in India.
Some firms also cited issues with customs, notably in India, Russia and Turkey. Issues included goods being held or delayed, ‘pass through’ charges and other additional payments (sometimes not perceived to be legitimate).
Intellectual property protection was also found to be a potential barrier in the minds of some companies. A survey of SMEs found that most tend to use IP protection in all markets they operate in but a significant number were of the opinion that there were some high-growth markets where IP protection was more necessary. These markets were: India, Russia, China, Turkey, Korea and Taiwan. Firms selling innovative goods and services also tend to encounter greater difficulty with legal and regulatory issues, including protecting intellectual property.
Current exporters emphasise that adopting the right mindset is vital: every country has its own trading and taxation system and firms need to be willing to get to grips with those systems and adapt to them. So ‘doing your homework’ is vital when planning market entry. UKTI’s overseas network of staff based in British Embassies, High Commissions and Consulates can offer specialist expert advice and support for each high-growth market.
There are also many other public and private sector forms of support through lawyers, business umbrella groups such as chambers of commerce and networks of peers.
Companies that want to know more about identifying, managing and protecting their intellectual property can get specialist assistance through the Intellectual Property Office (IPO), an executive agency of the Department for Business, Innovation and Skills. The IPO offers various forms of support, shortly to include a network of IP Attaches; IP experts based in country to assist UK businesses operate more effectively in key markets, including China and India. Companies can also speak to specialist law firms or can contact their local UKTI International Trade Adviser.
‘ I could set up a company in the UK in almost 24 hours but here in Qatar I would say that you’re looking at probably four months… to actually set up an office and have somewhere to live. You can’t do anything until you have your residence permit and your commercial registration – which takes up to 13 weeks – and only then can a company sponsor individuals to work for it.’
UK ICT company of less than 50 employees active in Qatar
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Discovering high growth (.pdf 2.87 MB)