There are six realistic routes into a new market: exporting, licensing, partnerships, mergers and acquisitions, setting up your own operation, and employing people there through an Employer of Record. They differ less on cost than on commitment. Exporting and licensing are reversible. Acquisition and incorporation are not.
Most companies should put people in a market before committing capital to it. Here is what each route involves. Last updated September 2026.
| Method | Speed | Commitment | Best when |
|---|---|---|---|
| Exporting | Fast | Low | You sell goods and do not need presence |
| Licensing | Fast | Low to medium | Your IP or brand is the product |
| Partnership | Medium | Medium | Local knowledge or licences are essential |
| Merger or acquisition | Slow to agree, fast once done | Very high | You need customers and a team immediately |
| Own operation | Slow | High | You need to trade locally |
| Hire via an EOR | Days to weeks | Low | You need people there, not a company |
1. Exporting
Produce at home, sell abroad. The most common entry route and the least committing.
You avoid the cost of establishing anything locally. What you take on instead is logistics: contracts with distributors, agents or retailers, shipping costs exposed to fuel prices and disruption, and tariffs that can quietly remove your margin.
The deeper limitation is distance from the customer. You learn slowly about a market you are not present in, and marketing designed at home often lands differently abroad.
2. Licensing
You grant another company the right to use your intellectual property. Exclusive, non-exclusive, or limited to particular territories or uses.
Two common forms:
- Franchising. Others operate under your brand and model. McDonald's remains the reference case.
- Private labelling. Your product is sold under someone else's name, or yours, by a local firm.
The appeal is speed with almost no capital. Your licensee already understands the market and has the distribution.
The risk is your IP. Cross-border licensing involves legal, tax and intellectual property questions in both jurisdictions, and the agreement has to specify exactly how your IP may be used. This is not a place to economise on legal advice.
3. Partnerships
A strategic alliance with a company already operating in the market.
Sometimes this is a choice, and sometimes it is the law. Saudi Arabia, among others, has historically required foreign companies to operate through a local partner in certain sectors.
A good partner brings market knowledge, relationships and cultural fluency you cannot buy quickly. For smaller companies without capital to establish alone, it may be the only viable route.
The cost is control. Partnerships involve compromise on decisions you would rather make alone, and governance is where they succeed or fail. Analyse the partner as rigorously as you would an acquisition.
4. Mergers and acquisitions
Buy or merge with an established local business and inherit its customers, staff, supply chain and distribution.
The fastest route to genuine presence, and the most expensive. You also inherit everything else: contracts, liabilities, culture and whatever the previous owners did not disclose.
Foreign ownership restrictions apply in many sectors. US rules limit foreign ownership of American airlines to 25%, and comparable restrictions exist elsewhere in defence, media, energy and telecoms.
Worth knowing before you commit: a substantial share of cross-border deals fail to increase market value, with failure rates commonly cited between 40% and 60%. Integration, not the deal, is usually where value is lost.
5. Setting up your own operation
A subsidiary or branch gives you full control and the ability to trade locally: invoicing customers, holding licences, signing contracts that require a local entity.
It also brings incorporation costs, typically $60,000 to $120,000, plus ongoing legal, accounting and filing obligations whether or not the market performs. Registration takes months, and over two years in some countries.
Worth it when the commitment is real. Expensive when it is a bet. The full comparison is in EOR vs owned entity.
6. Hiring through an Employer of Record
Not on most lists of expansion methods, and usually the right first move.
An Employer of Record legally employs your people in a country where you have no entity, handling contracts, payroll, tax, benefits and compliance. You direct the work.
That gives you something none of the other five routes do: real presence, with real people learning the market, without committing to a structure you may not need. Someone starts in days rather than months. If the market works, you scale or incorporate. If it does not, the arrangement ends with a notice period rather than a liquidation.
It pairs with the other methods rather than replacing them. Exporting works better with someone on the ground. An acquisition needs people in place before completion. A partnership benefits from your own staff alongside theirs.
How do you choose?
Start with what you actually need in the market.
Selling goods, no presence needed? Export.
Brand or IP is the product? Licence or franchise.
Local licences or relationships are a precondition? Partner.
Need customers and a team immediately, with capital available? Acquire.
Need to invoice locally or hold local licences? Incorporate.
Just need people there? Use an EOR, and decide the rest later.
The expensive mistake is committing to infrastructure before demand is proven. We cover the wider planning question in building an expansion strategy, and which markets suit which purpose in the best countries to start a business.
Work with Global Expansion
We employ people on your behalf across 214 countries and territories, handling contracts, payroll, benefits and compliance in each one, so you can enter a market before you commit to it.
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Frequently asked questions
What is the easiest way to expand internationally?
Exporting requires the least commitment if you sell goods. If you need people in the market, hiring through an Employer of Record is faster than any structural route, typically days rather than the months incorporation takes.
Do I need a legal entity to expand into another country?
Only if you need to trade locally, meaning invoice customers in-country, hold local licences, or sign contracts requiring a local entity. If you only need people on the ground, an Employer of Record employs them for you without incorporation.
How much does international expansion cost?
It depends entirely on route. Exporting can begin at almost nothing. Incorporating typically runs $60,000 to $120,000 before you hire anyone. An Employer of Record is a per-employee fee with no setup cost.
Why do cross-border acquisitions fail?
Usually integration rather than the deal itself: cultural mismatch, retention of key people, and systems that do not combine as planned. Failure rates are commonly cited between 40% and 60% on the measure of increasing market value.
Do I need a local partner to do business abroad?
In some countries and sectors, yes, by law. Elsewhere it is optional and depends on whether local relationships or licences are effectively a precondition of operating. Check the requirement before assuming a route is open.
Can I combine several expansion methods?
Yes, and most companies do over time. A common sequence is exporting to test demand, an Employer of Record to put people in the market, then incorporation or acquisition once the commitment is justified.
