Things to Consider When Renting an Office Abroad

Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership.

Expanding your market is always going to be the logical next step for a successful business, but like anything worth having, it is not without its challenges. There are great rewards on the horizon but in order to achieve them you must move from the familiar to the unfamiliar and for the unwary that is when problems arise. There is no such thing as over-preparing for a move abroad. That is not to suggest that there is only one location where your business will thrive, but there are certainly locations where it will struggle and perhaps even fail.

Location

The choice is daunting, but your decision needs to be shaped by the nature of your business, the scale at which you intend to operate, your workforce requirements, your supply line requirements and the new markets that you seek to enter. Financial considerations, either the opportunity to save money on running costs or incentives offered by particular governments will also be a factor.

Office/ warehouse costs

According to data from Statista, in the final quarter of 2021, London was the most expensive European city for rental prices of prime office locations, with an average cost of 1492 euros per square metre. By contrast, Lisbon is the most affordable SCALE city in which to rent office space, with an average cost of just 300 euros per square metre. Clearly, and it will depend on the particular requirements of your business, there are opportunities for huge savings.

Other opportunities to save money

Office costs are a major outlay, but you also need to consider the other costs involved in the proposed location: energy costs, transport costs and local taxation will be key factors. Lower labour costs may well be a key incentive, but will you be able to recruit the expertise you require?

MIFID 2 and GDPR compliancy

These are the two massive pieces of European legislation with which your business will need to comply if you intend to operate in Europe. MIFID 2 is a legislative framework established to regulate financial markets in the E.U. and it covers every aspect and profession within the financial services industry. The General Data Protection Regulation covers all aspects of data protection and privacy. Your business will need to be fully compliant with both systems.

Government incentives

There is fierce competition among governments to attract business and it is certainly worth shopping around to see which incentives might best suit your business. Germany, for example, offers direct grants, which do not need to be repaid, to offset start-up costs, promote research and development or establish a workforce. It also offers public loans, to cover up to a 100% of eligible costs, up to a value of 25 million euros.

Cultural difference

Any successful business will have an understanding of the subtleties of cultural difference, perhaps employing a culture consultant to ensure that inadvertent offence is not caused. Styles of language, body language, dress codes, values, and attitudes are not universal and an understanding of the culture, within which your business is a guest, is crucial.