Why Companies Have Multiple Headquarters

INTRODUCTION

Every big company aims to capture as much market shares as possible. There is then no gainsaying the fact that those companies locate or move headquarters overseas to take advantage of the many benefits that come with having headquarters overseas.

Having overseas headquarters enables big companies to have access to cheap labor; helps them avoid taxes and, many more. Large companies may decide to move headquarters overseas to have access to raw materials available in other which will help them boost production and consequently increase their world output. It is important to make it clear that having headquarters overseas has its advantage and disadvantage also. So, it is key for big companies to weigh their options before taking the necessary steps.

Advantages and Disadvantages of Moving a Business Abroad

Moving a business abroad implies expanding the business territories to explore new options. A big company for instance may decide to introduce its product to consumers in a developing country where there is not much competition. Every big company understands that when it comes to doing business, it is location, location, location. Moving a business abroad comes with its challenges because doing that means navigating unfamiliar terrain. A company has to analyze the cost and benefit before deciding to move.

Advantages

• Offshoring: Companies move headquarters abroad to take advantage of the lower cost of producing their goods overseas. It may be as a result of having access to raw materials used in production or avoiding taxes. Companies may also opt for offshoring if the productions of their products can only be handled by experts overseas.
• Cheap Labor: If it is certain that a company can get cheap labor to produce its goods overseas the company may decide to explore the option and its production to another country.
• Large Market Shares: Big companies that want to have a large market share of the world output within the industry may see a good reason to move their business abroad.
• Talent Explorations: Companies can take advantage of the large pool of talents that are available in a certain country to boost their production.
• Abundant Ancillary Services: If a company can have easy access to ancillary services for its production processes, such a company may decide to move its company overseas.
• Government Incentives: A company may find the incentives introduced by the government of a certain country favorable for its nature of business and so decide to move. 

Disadvantages

• Competition: Companies have to be wary of the hostile competitions they may be faced with by plying their trade in another country. It is possible that there are indigenous companies that produce the same goods as the company planning to move overseas.
• Language Barrier: This is a challenge common in international business transactions. Companies may find it hard to cope with the stress of having to learn the language of the people in their new locations. The branding of their products must also appeal well enough to the local customers so as to gain their loyalty, and this means understanding the language they speak.
• Unexpected Change in Government Policies: Government like every other thing in life is not constant. A government of a country may today favor the establishment of companies by foreigners, and another administration may come on board with unfavorable policies regarding the establishment of companies by foreigners.
• Cost of Transporting: Moving a business abroad means incurring the cost of shipping your facilities and personnel abroad too. The process may be costly and cumbersome at the same time.

One of the aims of any company is to promote its brand as far and wide as possible. It is only rational for companies to seek to expand their operations in other countries of the world. There are pros and cons of this practice. These are discussed in turns below:

Pros of International expansion

1. Access to New Regional Markets for Products and Services: International expansion avail companies new market for their products.
2. Brand recognition: The brand of a company will be more popularly recognized if it expands on the scenes.
3. Cost-Effectiveness Manufacturing or Production: If a company discovers it will be more cost-effective to manufacture its products by expanding internationally, the company should not hesitate to expand to other countries of the world.
4. Customer Service Centers: A company may deem it fit to have an overseas presence so that it will be able to provide outstanding customers service to  its loyal  international customers
5. Use of Free Trade Zone: A company may want to take advantage of the free trade zones in international trade and so expand its operations to those countries covered under the free trade zone policy.
6. Lower Operating Costs: Being able to produce goods at a lower operating may inform a company’s decision to ply its trade overseas.
7. Business-Friendly Laws: Companies want to operate in an environment where the law favors their operation, it is not then uncommon to see companies expand their businesses to countries where the business law is favorable.
8. Fewer Regulations: Excessive regulations can make the business ecosystem unfriendly for companies. So companies seek markets where they can operate with fewer regulations involved.
9. Government Incentives and Lower Taxes: Companies thrive in a country where the government offers incentives to business entities to widen the scope of the operation. Also, companies want to pay as little tax as possible. A company may seek a greener pasture where incentives are granted to them, and where the taxes paid will not erode their profits.
10. New Untapped Markets: Companies that see the potential market for their product overseas can decide to move to those countries in a bid to explore the untapped market in those countries. Growing competition in the local scene may motivate a company to seek a new market with potentials for the business of its nature.
11. Employing Skills and Talents not Available Locally: If companies realize there is a scarcity of experts who can handle their productions well, they can decide to go international in order to have access to the best brains available only in other countries. This is not an uncommon phenomenon in the tech industry. Tech giants such as IBM utilize experts in other countries in order to maintain the flow of operation in their company.

Cons of International Expansion

1. Tightening Immigration rules: The immigration rule in place in a particular country can make it less worthwhile for countries to explore new markets available in other countries. Be Companies face unnecessary delays in the procurement of raw materials from other countries as a result of stiff immigration rules that must be followed.
2. Cultural and Language Barriers: All countries have different cultures and do not speak the same language. This serves as a discouraging factor to companies that seek international expansion because it means you have to master the proper and acceptable way of communicating the benefits of your products to them. Learning the languages or getting the staff trained on how to speak may come at an extra cost for the firm, which is not favorable enough.
3. Incorporation Cost and Regulations: The cost of incorporating a business is huge, though it might vary with countries. The strict government regulations are another factor that may hinder the smooth exploration of new internal markets by companies. There are endless and time-consuming paper works for the companies. These must be done to make them legally established, and also get the permit to commence operations. The time-consuming nature of these procedures makes it difficult for companies to expand their operations internationally.
4. The Need to Outsource Services:  In a situation where there are not enough experts that can handle a specific part of a company’s operation, the company may still need to outsource the operation to experts in another country. Outsourcing may cause a delay in the operation of a company because of the procedures that have to be followed in getting the service done overseas.
5. Capitalization and Ownership Requirement: The huge capital involved in establishing and owning a company is high. This draws a setback on the ease with which a company can get its brand on the international scene. Setting up an incorporated costs millions of Dollars. Getting the finance necessary to run the company can sometimes be a challenge.
6. The Need to Pay Custom and Excise Duties: The unsavory delay in the supply of useful raw materials to the location where they are needed sometimes poses a challenge to international expansion. Companies pay a high amount of money as excise duty, and this raises their cost of production.

How Do I move my Office to a New Place?

Moving an office to a new place may be a daunting task because you are moving to a place you might not yet be familiar with. You will have to familiarize yourself and your business with the legal requirements of the new place, understand the culture of the people and compete with businesses similar to yours. With useful tips, however, you can find it easier to move your office to a new place.

What You Should Do Before Moving

1. Allocate a desk number to each of your staff members.
2. Ensure you and your staff properly label the office equipment. These include your cabinets, computers, printers, furniture, and other necessary equipment you use in running your business.
3. Empty the file cabinets of any contents, and lock them properly. This will make the cabinets easy to move to your new location.
4. Ensure items like cables, phones, and keyboards are placed inside plastic bags and are labeled accordingly.
5. Take your valuable items and devices such as laptops, iPads, and any other valuable devices home. Avoid packing these items.
6. Items meant to be shared in places such as kitchen, utilities rooms and restrooms should be labeled as spelled out in your floor plan.

What You Should While Moving

1. Put a proper moving arrangement in place. Get your company representatives to be present at your new location and the new location. If you have more than a single truck moving your items and equipment, ensure there’s at least a representative in both locations who monitor the going and coming of the trucks moving your properties until the trucks moved all the items successfully.
2. Encourage the removalists to work on a single area at a time. This is ideal especially if you are moving to a bigger building. This will allow you to give instructions on the proper arrangement of items in the building. You will also be able to attend to any questions they have to ask as regards the arrangement.
3. The connection of gadgets such as office phones and computers should come last. This means you will have to be patient for the proper arrangement to be made in your new office building. The installation of your devices should come last after which your staff can resume work.

FAQs:

1. Why would companies based outside the U.S. register their headquarters in the U.S.?

Companies located outside the U.S. may decide to register their headquarters in the U.S. to take advantage of the favorable regulations that exist for a business that is not available in other countries. They may also register in the U.S. if the corporate tax payable in the U.S. is lesser than that payable where they are domiciled. This is called tax inversion. In general, a company that finds it reasonable to expand its operation to the U.S. would be willing to register its headquarters in the U.S.

• What Are the Factors Affecting International Expansion?

The factors affecting international expansion includes ease of doing business overseas, the need to gain brand recognition, availability of raw materials in other countries, untapped new market, differences in climatic condition, technological difference or constraints, availability of cheap labor in other countries, the need to avoid taxes, availability of government incentives, and the need to avoid competition locally.

• Why do companies manufacture in other countries?

Companies manufacture in other countries if there is the availability of raw materials necessary for the production of their goods. Another key reason companies will want to manufacture in other countries is the availability of cheap labor which will help them lower the cost of production.

• Why do companies move production overseas?

There are a good number of reasons why companies move production overseas. These include brand recognition, low cost of operation, favorable business laws and regulations, coverage of time zone, availability of large market, employing experts that are not locally available.

• What is it called when a company moves overseas?

Offshoring is when a company moves overseas.

• What percentage of Walmart products are made in China?

More than 70% of Walmart’s products are made in china.

• Why do most European companies move their administrative headquarters to the Netherlands?

Most European companies move their administrative headquarters to the Netherlands because of the availability of infrastructures. The Netherlands boasts of the largest port in Europe located in Rotterdam, so import and export are facilitated by the existence of this port.

• Why is it that most headquarters are located in Switzerland?

Most headquarters are located in Switzerland because it is a very peaceful country. The country is known to maintain neutrality in times of war.