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The five routes into a new market are acquisition, franchising, joint venture, exporting and setting up locally. Most companies should test with people before committing to any of them. An Employer of Record lets you put a team in a country in weeks, prove the market works, and leave with a notice period if it does not. Incorporating first means months of setup and an expensive exit if you were wrong.
Here is what each route commits you to, and five things to get right before you pick one. Last updated September 2026.
| Route | Speed | Commitment | Best when |
|---|---|---|---|
| Acquisition | Fast once closed | Very high | You need the customers and the team now |
| Franchising | Fast | Medium | Your model is repeatable and brand-led |
| Joint venture | Medium | High | Local knowledge or licences are essential |
| Exporting | Fast | Low | You are selling goods, not building presence |
| Local entity | Slow | High | You need to trade locally |
| Hire via EOR | Weeks | Low | You need people there, not a company |
Expanding internationally opens up customers, talent and revenue you cannot reach from one country. It also brings local employment law, cross-border payments and a set of obligations that are easy to underestimate until you are inside them.
What is an international expansion strategy?
A plan for entering a market that covers more than the product. Who you hire and how you employ them legally. What compliance applies. What you change for local customers. What you do if it does not work.
The last one is the part most plans skip, and it is the one that determines how expensive a wrong bet becomes.
What are the ways to expand into a new market?
Mergers and acquisitions
Buy a local business and inherit its customers, staff and market position. Fastest route to real presence, and the highest commitment. You also inherit its contracts, liabilities and culture.
Franchising
Local operators run under your brand using your systems. Asset-light and quick to scale, at the cost of direct control over quality. McDonald's remains the model everyone else is compared against.
Joint ventures
A formal partnership with a local business. Common in energy, manufacturing and healthcare, where local licences or relationships are effectively a precondition of operating. Governance is where these succeed or fail.
Exporting
Produce at home, sell abroad. Low risk and low commitment. The limits show up in logistics, customer service and how well you can read a market you are not present in.
Establishing a local presence
A subsidiary or branch gives you full operational control and local trading ability. It also brings incorporation costs, employment obligations and tax filings. We break the numbers down in EOR vs owned entity.
Hiring through an EOR
Not on most lists, and usually the right first step. An Employer of Record employs people for you in a country where you have no entity. You get a team on the ground in weeks without committing to a company.
5 tips for building an expansion strategy
1. Are you actually ready?
Before anything else, check three things honestly. Enough cash to fund a market that takes longer than planned. A team and systems that can carry the extra operational load. Real evidence of product-market fit where you are going, not an assumption that it will transfer.
Expanding to escape a problem at home rarely works. The problem travels.
2. Research the market properly
Customer behaviour, competitors, pricing expectations and cultural norms. Then the practical layer: local wage levels, employment law, notice periods, mandatory benefits.
That second layer is where budgets break. Salary is not the cost of an employee, and the gap between the two varies enormously by country. CountryPedia covers hiring requirements across the 214 countries and territories we operate in, and our employee cost calculator shows what sits inside the total.
3. Stay flexible until the market proves itself
Boston Consulting Group research in 2023 found agile organisations respond to change two to four times faster than traditional ones. In an expansion context that means not building infrastructure before you have revenue to justify it.
Hire a small team through an EOR. Learn what the market actually wants. Scale if it works, leave cleanly if it does not. Compare that with liquidating an entity you set up in month one.
4. Plan for what goes wrong
New markets carry cultural, economic and political risk that your home market has taught you nothing about. Think past the obvious: shipment delays, customs, supplier failure, currency movement, political change.
Then plan the exit. What does leaving cost? An EOR arrangement ends with a notice period. An entity takes months and legal fees to dissolve. Knowing the difference before you commit changes which route you pick.
5. Get local expertise, not local guesswork
Employment law, payroll filings and cultural norms are all things you can learn slowly and expensively, or buy. A partner with people in the market gives you the regulatory position and the commercial context at the same time.
That includes knowing whether your provider actually operates in your target country or subcontracts there, which we cover in EOR operating models.
Your international strategy, backed by Global Expansion
We handle employment, payroll, compliance and immigration across 214 countries and territories, so you can test a market before you commit to it.
Tell us where you are going and we will tell you what hiring there actually involves.
Frequently asked questions
What is the fastest way to enter a new market?
Hiring people there through an Employer of Record, usually within weeks. Acquisition is faster once a deal closes but the deal itself takes months. Incorporating takes months before you can legally pay anyone, and over two years in some countries.
Do I need a legal entity to expand into another country?
Only if you need to trade locally, meaning invoice local customers, hold local licences or sign contracts requiring a local entity. If you only need people on the ground, an EOR achieves that without incorporating.
How much does international expansion cost?
It depends entirely on the route. Exporting can start at almost nothing. Setting up an entity typically runs $60,000 to $120,000 before you have hired anyone. Hiring through an EOR is a per-employee fee with no setup cost.
What is the biggest mistake companies make expanding abroad?
Committing to infrastructure before proving demand. Incorporating, leasing an office and hiring a full team in month one means a very expensive reversal if the market does not respond as expected.
How do I choose which country to expand into?
Start with where your customers already are, then check the practical layer: talent availability, employment costs, regulatory burden and ease of exit. Our guide to the best countries to start a business compares nine markets on exactly those terms.
Can I switch from an EOR to my own entity later?
Yes, and many companies plan for it. Use an EOR to enter and prove the market, then incorporate and transfer the team once the commitment is justified. Raise it with your provider early so the transfer is clean.
