When you’re planning to expand your startup abroad, the “where” will determine the “how”. Numerous factors will help you make the right decision.
Some will be related to your product. Others will be about the differences between your home and the target markets.
For instance, if you sell physical products, you’ll need to have shipping costs in mind. But, regardless of whether that’s the case, it will be crucial for you to understand whether there’s an untapped need in your target market that you could fulfill.
And localisation is always key for a successful expansion, so you’ll always need a deep understanding of regulatory, linguistic and cultural differences.
The Caribbean might not be the first region to come to your mind, but that doesn’t mean that it has nothing to offer. In this post, we’ll take a look at five reasons why you should consider doing business in the Caribbean.
Plenty of room for innovation
In this region, governments, NGOs and private enterprises are joining forces to, for instance, guarantee better telecommunications.
Technological progress is arriving at the Caribbean with a delay, which gives us an opportunity to accelerate this process while growing our business. For example, it’s worth mentioning that local players are mostly lagging behind in disciplines like digital marketing and web development.
Also Read: Why startups need to localise to expand overseas successfully
In the Caribbean, you’ll have an impressive competitive advantage just by guaranteeing the quality you normally deliver to clients in your home country.
Social entrepreneurship
Understanding your target region’s entrepreneurial ecosystem is key to make the strategic partnerships that drive good business.
In a 2016 paper about social entrepreneurship in Haiti, Oumar Diallo and Marie Evadie Daniel explain that “the main objective of social entrepreneurship is to solve social, economic and environmental problems for sustainable development goals.”
Effective social entrepreneurship is about understanding the business and popular cultures in the region, being aware of social and financial shortcomings, and creating growth that won’t only drive sustainable growth for your stakeholders, but also to local communities.
If you’re up for the challenge, the Caribbean not only has a solid tradition of social entrepreneurship but also solid institutional support.
Tax benefits
Expanding your company to the Caribbean might have amazing tax benefits. Some companies are even choosing to incorporate in the Cayman Islands.
The Cayman Islands is the world’s fifth finance and banking centre, and it offers companies an incredibly favourable tax climate, similar to Singapore in Southeast Asia.
Aside from lower taxes, Caribbean countries can offer you stability, fast incorporation processes and cost-effective legal counselling.
But, incorporating offshore, while cost-effective, might dissuade some investors, who might want the transparency that they know that their local institutions guarantee. This can be fixed by having your funding agreements designed for transparency by an experienced law firm.
The Blue Economy
“The blue economy” is defined as “[t]he economic activities that take place in the ocean, receive outputs from the ocean, and provide inputs to the ocean”.
For decades, experts have stated that the new frontier for the Caribbean’s economic growth is the ocean. And NGOs are working to help preserve the Caribbean sea, as a way of preserving the countries’ capital. More specifically, their ocean’s natural capital assets.
During the 2015 G20 Development Working Group, several Caribbean countries expressed their desire to make policy-related moves towards a Blue Economy. Since then, organisations such as the World Bank have collaborated with governments, research institutions and private entities to lay the groundwork for a solid, sustainable blue economy.
Since 2014, five National Ocean Policies have been created in the region, along with a series of institutions that make the scientific and governance-related leap to a blue economy possible.
For ocean-focused startups, the Caribbean is the place to be.
An educated, multilingual workforce
While English isn’t the official language of all Caribbean countries, you can make yourself understood while speaking English, practically anywhere you go.
With a complex, culturally diverse past, and tourism as one of their highest-grossing industries, Caribbean countries are mostly multilingual. And, with geographical proximity to Mexico and the US, comes a set of shared cultural codes.
You’ll need to localise your message to your new audience and translate employee handbooks and other material, in order to minimise misunderstandings. But, the cultural gap you’ll have to close isn’t as wide as it would be in other countries.
Also Read: 3 ways to know if your startup is ready to go international
On the other hand, it’s worth noting that higher education is either very affordable or tuition-free in most Caribbean countries. So, by establishing a branch of your company here, you’re getting access to a culturally-aware and highly-educated workforce.
Strategically located
The region’s location is linked to one of the region’s greatest downsides: Its vulnerability to natural disasters. But it can serve as a bridge between the US and one of the most promising markets in the world: South America.
If you’re in the US, you’re nearer than you think to a whole new market with enormous innovation potential. You can go global with the help of a highly-educated and multilingual workforce, in a culture similar to your own, and your product is unlikely to get lost in a sea of competition.
Of course, innovative startups need supportive and resourceful ecosystems to thrive. While the World Bank Group, as well as several NGOs, are starting and incentivising incubators in the region, the Caribbean ecosystem is still in its very early stages. International investors who don’t shy away from ventures in foreign economies might be your best possible partners.
As Southeast Asian startups look to expand and grow beyond the region, the Caribbean could be a far-out but probable destination.
Instead of competing with giants in India and China which are the obvious gateways for rapid expansion, startups can use the learnings from overcoming regional diversity and slow regulatory growth here and excel in the multicultural islands of the Carribean.
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