Top 10 Best Countries for International Expansion

Every year, more and more businesses contemplate the pros and cons of international expansion. Some companies want to see if a product will be successful in a new region, while others need large scale workforce support for manufacturing. Regardless of the reasoning behind a company’s decision to expand, the process can feel overwhelming, even for the most experienced businesses. In this article, Global PEO Services shares the best countries for international expansion. This list is based on data gathered from in-house analytics and reports from 2021, for the purpose of helping organizations through the decision-making process during global growth.

1. Canada
2. United Kingdom
3. India
4. Philippines
5. Mexico
6. China
7. Ireland
8. Singapore
9. Japan
10. Brazil

Why Expand to Canada?

• Proximity to the U.S.
• Highly educated workforce
• 15% federal corporate tax rate
• Social familiarity with the U.S.
• Stable economic growth

As one of the world’s largest economies, Canada has experienced a decade-long period of stable economic growth, which makes it an attractive destination for businesses across the globe. As a neighboring country to the U.S., Canada provides ample convenience and opportunity for growth. When seeking to do business there, it’s important to keep in mind that Canada is a bilingual country, so it’s important for companies to understand French to avoid any confusion when dealing with consumers or suppliers.

Canada ranked 6^th on the Forbes Best Countries for Business in 2018. And despite the challenges of the past few years, the nation’s GDP was on track to recover by the end of 2021, according to the World Bank. This stability, in conjunction with a strong workforce, makes Canada an ideal destination for expansion.

According to the Organization for Economic Co-operation and Development (OECD), 62% of 25-34-year-olds in Canada have a secondary education, which is the second highest rate in the world. Although the country boasts a skilled workforce, the federal corporate tax rate for businesses is currently 15%. For these reasons, Canada tops our list of top 10 best countries for international expansion.

Why Expand to the United Kingdom?

• Strong relationship ties
• 7,500 U.S. businesses currently operate in the UK
• 7^th largest trading partner for the U.S.
• 19% corporate tax rate
• One of the world’s leading financial centers

Generally speaking, Europe is a popular destination for many U.S. companies considering the best countries for international expansion. According to the U.S. Chamber of Commerce, The UK is the United States’ 7th largest trading partner and the 5th largest export destination for American goods and services. Approximately 42,000 American firms export to the UK and more than 7,500 have operations there.

The positive business relationship between the UK and the U.S. has resulted in $758 billion invested into the British market. When it comes to finding top talent for your business, the UK has the second largest workforce in the EU. However, they do have a relatively high corporate tax rate of 19%.

With a stable economy and a strong, educated workforce, the UK is often a steppingstone for global expansion. Because the UK has easy access to the rest of Europe and Asia, growth opportunities are plentiful.

Why Expand to India?

• World’s largest market for manufactured goods and services
• Projected to be the 6^th largest economy in 2021
• Skilled workforce with focus in technology
• 25% corporate tax rate, depending on revenue

When considering best countries for international expansion, India is a fast-growing nation with the world’s largest democracy. Due to recent rapid growth, India has become the 5^th largest country by GDP in the world. This is the highest rate of growth in the past decade, with annual growth rates between 6-7%. Part of their growth is due to eased foreign direct investment (FDI) restrictions, including foreign equity caps for insurance and defense. The World Economic Forum ranked India’s economy as a 90/100 on their Global Competitive Index.

Additionally, India has recently become a central hub for technology support and innovation. And as U.S. companies in these industries continue to grow, the demand for fulfillment increases exponentially. High-tech companies are leveraging India’s workforce to support sectors like telecommunications, information technology, pharmaceuticals, textiles, and engineering.

Why Expand to the Philippines?

• Fast-growing region within in ASEAN
• 3^rd largest English-speaking country
• 95% literacy rate
• 25% corporate tax rate
• Highly educated and flexible workforce
• Popular tourism destination

The Philippines is one of the fastest-growing regions in the Association of Southeast Nations (ASEAN). With tourism fueling economic growth, it is the third largest English-speaking country in the world. With over 100 million residents, the Philippines has potential to be an incredibly lucrative new market for expanding businesses.

This country also has a highly trainable and well-educated workforce. With an estimated 350,000 graduates and a country literacy rate of 97.95%, the Philippines is an incredibly attractive destination for many U.S. companies. Additionally, the cost of living here is relatively low, which means employers can pay lower wages for top talent.

As part of the ASEAN Free Trade Area (AFTA), companies doing business in the Philippines can expect smooth trading and manufacturing support. The AFTA also facilitates economic integration with both regional and international allies. The corporate tax rate in the Philippines is currently 25%. All these considerations make the Philippines one of the best countries for international expansion.

Why Expand to Mexico?

• 15^th largest economy in the world
• Proximity to the U.S.
• Affordable and skilled manufacturing workforce
• 30% corporate tax rate
• Stable economy

As the other neighboring country to the U.S., Mexico has recently become a popular destination, making it to our list of top 10 best countries for international expansion. Before the pandemic, Mexico was the world’s 15^th largest economy in the world with a GDP of $1.27 trillion, according to the World Bank.

Over the years, Mexico has become a strong manufacturing center for many U.S. businesses. Mexico’s free trade agreements with the U.S., Canada and 44 other countries make it an easy country to conduct business in. Additionally, Mexico supports a variety of exports such as consumer electronics, vehicles, auto parts, petroleum, and agricultural products.

Although Mexico does have a highly qualified workforce, it also has a high corporate tax rate of 30%. It’s important to keep in mind, however, that the lower labor costs, especially for manufacturing, can offset the higher tax rates.

Why Expand to China?

• 2^nd largest economy in the world
• Low-cost manufacturing
• Prominent economic and technological success
• Standard corporate tax rate of 25% with 13% VAT on most goods and services

Although China is a popular destination for businesses, the complexity of their laws and regulations can be overwhelming without sufficient knowledge and expertise. Regardless, China offers attractive opportunities for growing businesses, as it has set a precedent for low prices for manufactured products. For this reason, many businesses open factories or subsidiaries in China.

China has a stable and growing economy, rivaling the U.S. in GDP and other growth metrics. Their focus on driving STEM programs and creating innovative technology has nurtured a highly skilled working class for businesses. Despite the legal complexities, China continues to be one of the best countries for international expansion in the world today.

Why Expand to Ireland?

• One of the lowest corporate tax rates in Europe at 12.5%
• World Economic Forum ranks Ireland in the top 15 countries with a skilled workforce
• The only entirely English-speaking country in the EU
• Economic flexibility due to Brexit
• Stable economy

There is no doubt that the pandemic has had an impact on every country in the world. Ireland, however, was one of the few nations that experienced economic growth during this period, which is a testament to their ingenuity and resourcefulness. With 3.4% GDP growth in 2020, Ireland vastly outpaced the rest of Europe, which experienced a 7.4% decrease in GDP.  Although China was deemed the most successful economy during the pandemic, Ireland managed to record much higher growth rates overall.

As companies seek destinations for international expansion, Ireland’s prosperity during hard times cannot be ignored. While other industries in Ireland shrank by 9.5%, multinational companies located there recorded 18.2% growth in 2020. This is likely one of the reasons that many companies are considering Ireland for expansion in 2022.

Ultimately, Ireland’s business-friendly environment has made this country one of the best countries for international expansion for 2022.

Why Expand to Singapore?

• Low corporate tax rate of 17%
• Highly educated and skilled workforce
• Almost half the country speaks English
• Reliable economic growth year over year
• Ranked 5^th in the world as the most competitive economy

With its favorable tax code to consistent and reliable economic growth, Singapore is an ideal country for expansion. When it comes to ease of doing business, Singapore placed second out of 190 countries on the World Bank’s rankings.

With a highly educated workforce, business-friendly environment, and stable economic growth, Singapore has proven to be one of the best countries for international expansion, depending on your needs.

Why Expand to Japan?

• Highly advanced technological nation
• Strong employment stability and highly qualified workforce
• Affordable and skilled manufacturing workforce
• Bracketed corporate tax rate from 15%-23%

Japan is world renowned for its advanced technology, transit capabilities, and diligent workforce. As companies consider global expansion, they often took to Japan for its vast network of highly educated, hardworking and skilled employees. This fact alone is a major contributing factor as businesses consider the best countries for international expansion.

Japan has a bracket corporate tax structure ranging from 15% to 23%. According to the World Bank, the nation is ranked 30 out of 190 for the ease of doing business, though setting up business here does involve some regulatory complexities. While this may mean that businesses will require more expertise when hiring and establishing administrative processes in Japan, it certainly should not deter companies from expanding here.

Why Expand to Brazil?

• 12^th largest economy in the world and largest in South America
• High growth potential for businesses
• Affordable and skilled manufacturing workforce
• 34% corporate tax rate

Brazil is considered a developing country with high growth potential; but this also means that many aspects of the economy are still in development. The regulatory environment and investment sphere in this nation is volatile, but the consumer market for eCommerce and automotive industry is booming.

Businesses that choose to expand to Brazil need to understand the complexities of their tax system and relatively complex compliance requirements. You may not see Brazil on other Top 10 lists, but its potential and trending data suggests it will soon become one of the best countries for international expansion in the near future.