Doing business abroad: obstacles to overcome

More opportunities, different risks

A foreign initiative can offer your company more opportunities, but it may also expose your company to different risks. These risks are not necessarily the same as those you face in Belgium.

• Commercial risks are inseparable from trading activity. Business partners sometimes break or fail to comply with contracts. Invoices may not be paid on time, or deliveries may not take place when they should. Having national borders between you and your new market does not make things any easier.
  
  
• Political risk and currency risk are strongly location-specific. Depending on the market you are entering, there may be obstacles that disrupt your plans. War, unrest, sanctions, embargoes, and problems with currency availability and payment settlement can hinder smooth trading.
  
  
• The law is not applied in the same way everywhere in the world. Procedural risks may also arise. These are often determined by the type of contracts you conclude abroad. It is therefore advisable to familiarise yourself with the applicable laws. It is also wise to make provisions to recover funds where necessary.
  
  
• Transporting your goods can also carry specific risks. It is a highly complex area. Good agreements between all parties involved are required for setting up and supervising transport. Who is organising or financing the transport: you or your international partner? Where exactly are the goods being transported from and to? Who carries the risk? For which sections of the journey are you responsible and/or required to insure? A strong grasp of the international Incoterms is essential here.
  
  
• Going abroad often means encountering unfamiliar local financial and payment systems and regulations. This is particularly true if you are operating outside the European Union and/or the eurozone. In that maze, it is easy to lose sight of the bigger picture. Without proper guidance, you may quickly struggle to keep a clear view of your international trade risks.
  
  
• There are also other risk factors to consider, such as administrative and customs requirements, language differences, and local technical terminology.

As a well-prepared partner, BNP Paribas Fortis has the necessary expertise. We use this knowledge to help you prepare for these risks. We also use it to ensure that your company remains on a safe course in new circumstances. Doing business across borders involves navigating a complex web of international rules and agreements. These are used as the basis for discussions by domestic and foreign financial institutions. It is crucial for you and your international partners to have a knowledgeable banker at your side. Thanks to a shared value system based on international agreements, bankers speak the same language across borders. They share mutual trust. This helps you and your foreign business partner to build a balanced, trustworthy relationship.

The longer road

If you are used to doing business in the Belgian market, you probably know the local regulations, procedures, forms and customs inside out. Abroad, however, you will need to familiarise yourself with new procedures and customs. This is why your path to the market there will be longer.

Public tenders may take more time or require certain guarantees. Producing your goods may also take longer. You may also feel as if you are dealing with more paperwork, and more complicated paperwork at that. The market will also seem more distant because it takes longer for your transport to reach it. In addition, you are likely to face longer payment terms.

All of these factors affect your working capital. Sometimes, you simply need more of it. If your need for working capital increases, you will also require additional short-term financing. Having a strong partner such as BNP Paribas Fortis, who recognises this and provides additional short-term financing when required, is invaluable when managing international trade risks.

Who am I doing business with?

Every entrepreneur knows that trust is the foundation of business success. This trust often grows organically through communication with partners, negotiations and, as simple as it may seem, shaking hands. However, simple things can suddenly become complicated when your partner is based overseas. Your natural flair for negotiation and deal-making is put to the test because you lack information about potential foreign partners. Questions such as 'Who exactly am I dealing with?' can quickly lead to uncertainty and possibly even mistrust.

Building a climate of trust with your international contacts can be a major advantage in many situations. This is certainly true when competitors appear on the market. Without trust, you may find yourself at a disadvantage. To prevent this, you need support. Imagine having a partner who could help you move forward by providing solutions, networks and local contacts. BNP Paribas Fortis is ready to assist you in exactly this way.

You can rely on BNP Paribas Fortis

BNP Paribas Fortis understands that entrepreneurs have many questions when considering foreign trade and international trade risks. Do you have plans to import or export, or do you want to expand your existing international activities? Are you looking for new opportunities abroad? If so, contact your relationship manager. They will be happy to connect you with a specialist.