So, you’re finally set out to expand your business into Malaysia, you’re trying to look for countries that are profitable for your business. While we’re happy about your decision to expand your business, did you know that there are risks to doing business in certain countries across the world?
Firstly, what do we mean by risks and how do we assess them in a country? A high-risk country basically refers to the instability of a country’s business environment which might jeopardise the investments and profits of a company. The stability of a business environment can be assessed by a few factors:
Economic risks refer to the economic stability of a country. Always research a country’s financial background as no country is free from economic risks. Take the United Kingdom (UK) for an example, the Brexit movement has had a great impact on their economy.
Political and Legal issues
Political and legal issues simply are used to define a company’s government stability, or other factors such as terrorism, crime, laws, and information transparency. .
Structural assessments, on the other hand, are fixed factors that a company may have to consider. These factors will include the physical premise, labour force, competitors, and demographics of the country
Finally, a country’s debt will have to be considered when assessing a country if a country’s government is in deep debt, it may cause inflation and destabilization of currency which might greatly impact businesses in that country.
Every country’s risk is unique and specific to each country, so these few factors can be used to judge the stability of a country. This is important as assessing a country’s risk can help companies to predict their growth and prepare for the unpredictable future.
With that said, I’m sure you’re eager to know the countries that are listed as high-risk countries.
I’m sure now there’s another question on your mind now since they are high risk, why do businesses even want to consider them? That’s a great question that you’ve just answered yourself! Yes, as most entrepreneurs want stability, they would prefer low-risk countries instead of these high-risk countries. This ultimately creates a highly competitive business environment within the low-risk countries as everyone wants a piece of it.
So, entrepreneurs would consider these high-risk companies as they have exponentially high growth potential which is why they attract risk-taking entrepreneurs regardless of the size of the business. Thus, entrepreneurs that want to take up the challenge will have the understand the risks that are involved when entering these high-risk countries.
Did you know that expatriates from low-risk countries have a higher chance o compared to high-risk countries? Since the Pandemic is still a global issue, why not hire an expatriate for your company for insights and knowledge? Eager to learn more drop us email [email protected] or visit here to learn more!