Setting up a local business

    We can advise you on setting up a local business. You have decided to venture into a new international market. Perhaps you will do business in Germany, or even outside Europe. The question is: are you just going to sell your products or services there, or are there benefits for you in producing abroad as well? Your account manager can advise you.

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    International business

    Choosing the company type

    Setting up a business abroad means you will be closer to your sales market. This will enable you to adapt quickly to local needs. You should consider a number of points when deciding which type of company is best for you.

    Open a local office with local sales force

    • specific local knowledge

      local network

      flexibility as regards costs

      limited control of the sales market

    Open a local office with Dutch sales force

    • knowledge of the company 

      more control of the sales market 

      local knowledge limited

    Setting up a local production facility

    • lower production costs

      raw and other materials available locally

      logistic benefits if production takes place close to sales market

      specific local knowledge

      often a considerably larger investment than setting up a local office

      not beneficial logistically if this means a greater distance between the sales market and the production facility

    Cooperate with existing local party (joint venture)

    • knowledge of the local market and customs

      local network

      relatively cheap form of setting up a local business

      shared control, not completely independent

    An important aspect when setting up a local business is to determine how your business will be positioned in the local market. How will you be positioned in relation to the competition? Thoroughly analyse the market you are going to operate in and then assess which steps you want to take.

    Risk management

    There are risks involved in setting up a business locally. Together with your account manager you can decide how you can cover your business risks abroad.

    Political risk

    You may have to deal with an event abroad that constitutes force majeure, such as war, a trade boycott or government measures.

    Transfer risk

    Your company may lose income because currencies cannot be exchanged as a consequence of political events or circumstances.

    Economic risk

    Your competitive position could be negatively affected or your future cash flows could change as a consequence of changes in prices and/or exchange rates. If you generate your revenue in a country with a currency which weakens and your costs are made in a country with a strong currency, an ever-increasing mismatch can occur between your income and your expenses.

    Interest-rate risk

    Movements in interest rates can have a negative effect on your operating result.

    Currency risk

    Currency rates are always changing. Your business is dependent on these movements, which can have both positive and negative effects.

    Finance

    You may require finance to set up your local business. We have various financing options, including in countries that are less obvious choices. 

    Your account manager and an International Finance Manager will jointly assess which financing mix best suits your company's situation.

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    Read more about finance

    Political risk

    You may have to deal with an event abroad that constitutes force majeure, such as war, a trade boycott or government measures.

    Transfer risk

    Your company may lose income because currencies cannot be exchanged as a consequence of political events or circumstances.

    Economic risk

    Your competitive position could be negatively affected or your future cash flows could change as a consequence of changes in prices and/or exchange rates. If you generate your revenue in a country with a currency which weakens and your costs are made in a country with a strong currency, an ever-increasing mismatch can occur between your income and your expenses.

    Interest-rate risk

    Movements in interest rates can have a negative effect on your operating result.

    Currency risk

    Currency rates are always changing. Your business is dependent on these movements, which can have both positive and negative effects.

    Rabo Corporate Connect

    Rabo Corporate Connect is the large corporates transaction portal for your international money flows. It enables you to arrange and review all your payments, currency purchases and currency sales directly online.