Unlocking global markets with robust regulatory roadmaps

Businesses are looking to grow their operations and open new markets abroad even as they face continued geopolitical, economic, sustainability and technological challenges. In our recent C-suite Barometer, 94% of executives expected their business to grow during 2024 and 25% were actively eyeing global expansion with Europe, the USA, and China identified as the top growth opportunities.

Yet even as executives express their optimism for international expansion, they must navigate their way through an increasingly complex regulatory landscape where different countries, regions and industry sectors are setting strict agendas.

Some of the regulations faced by companies looking to expand internationally – around tax or finance laws for example - will be very familiar to most businesses executives no matter where they are located. Other forms of regulation, however, such as new rules around sustainability or technology compliance, will be a completely new concept for many businesses. In the last few years, jurisdictions all over the world have introduced new regulations to tackle growing 21st century trends such as cyber security, anti-money laundering, digital banking, climate change and the rapid growth of artificial intelligence.

A spotlight on Europe

Europe has been particularly proactive in strengthening its regulatory frameworks – setting the benchmarks that companies looking to operate in the EU must achieve and helping them prepare for compliance in other jurisdictions. This is particularly relevant for Chinese companies expanding into Europe, because, in general, compliance in the APEC region is less stringent than in Europe.

“The EU is posting a lot of new regulations and that is making compliance more and more complex,” says Nikko Fu, Partner, Forvis Mazars Global China Services. “So Chinese companies need to spend more time and more budget to understand EU regulation. And to make sure all their accounting and audit related work are in compliance.”

Each member country in the EU also has its own national regulations so compliance is always going to be more complicated than in some other parts of the world. But perhaps the biggest challenge for Chinese and other international companies establishing a presence in Europe comes in the form of new types of regulation – notably around climate, sustainability, and technology.

“Chinese companies now need to think about how to meet the ESG requirements in Europe and that is definitely a new cost that they haven’t really had to budget for in the past,” says Nikko.

Their focal point will be complying with the new requirements of the Corporate Sustainability Reporting Directive (CSRD). For many companies unfamiliar with sustainability reporting, that will involve training new people, hiring new talent, creating new departments and implementing new internal control processes.

Whatever the type of regulation, and wherever it is being applied around the world, it’s clear that companies need to plan carefully and do due diligence on the best ways to achieve compliance while successfully growing their business. That involves finding good local partners who can offer trusted advice and understand the nuances not just of the regulation but also of local cultures and ways of working.

“Our seamless integration ensures a single point of contact and consistent methodologies everywhere, ensuring tailored service and flexible coordination, fast and efficient between your team and our multilingual and multicultural experts around the world.”

– Cindy Cappia, Forvis Mazars International Desks

For those expanding beyond just one jurisdiction, it is becoming increasingly important to have a multinational perspective on regulation so that the investment being made, and the information being gathered, in one jurisdiction can also help meet the different (but often similar) requirements of other countries.

As regulation becomes more complex in more jurisdictions, this combination of forward-looking horizon scanning, working with people you trust, and taking a multi-jurisdiction view of compliance will help companies grow both globally and successfully.

For further insights on international expansion, visit our Growing Global homepage. 

Published: 24/7/2024

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.

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