How to buy a business for sale abroad

Buying a business for sale abroad can help you break into a new market without having to build a brand from scratch. Like so many things, however, success depends on careful planning and a good understanding of both the country you plan to operate in and the international business landscape.  

In this guide, we’ll look at reasons to buy a business for sale overseas, then go through the process step by step. 

Why buy a business for sale overseas? 

First, a disclaimer: it’s vital to understand that buying and operating a business anywhere involves a certain amount of risk. Before proceeding, we recommend speaking to a professional adviser familiar with the benefits and drawbacks of foreign business ownership.  

Existing brand recognition is one of the most compelling reasons to buy a business for sale abroad. With an existing customer base and a recognisable product or service, a profitable overseas company could provide a straightforward way into a new marketplace. 

Existing supply chains also help, though it's prudent to re-examine them occasionally to ensure they offer the best value for money.   

Finally, owning a business abroad can give you a base from which to expand further afield or – depending on the country’s immigration laws – gain residency via a business or investment visa. 

How to buy a business for sale abroad 

The process for buying an overseas business will vary based on the country, its licensing requirements and your chosen financing methods. That said, we can provide a general overview. 

Step 1: Research your new market 

It’s important to learn about the region you’re looking at before going ahead with an overseas business acquisition. Understanding the industry and market conditions can help you plan effectively and stay within your budget. 

• Look at local economic patterns over the past few years and possible upcoming trends. 

• Research the regulatory environment to see if there are licences you need to acquire before being allowed to do business. 

• Think about region-specific growth opportunities.  

Speaking with local business consultants or contacts in the country can give you valuable insight and make it easier to gauge how profitable your investment could be. 

Step 2. Identify companies for sale 

Once you have a solid grasp of your target market, you can begin identifying businesses for sale. Online marketplaces, local brokers and associates in the area can all help you find potential targets. 

While looking at possible options, it can be helpful to consider your investment goals and strategic vision for the future. Many entrepreneurs focus on four key areas when evaluating businesses for sale abroad: 

1. Current and projected future financial health. 

2. Overall reputation. 

3. Customer base.

4. Growth potential. 

Again, this can be a good time to enlist the help of a consultant or professional adviser with overseas business experience.  

Step 3. Shortlist and evaluate businesses 

Whether you have one business in mind or five on your shortlist, due diligence is critical. This is when you examine a company’s financial records, legal documents, contracts, operational practices, assets, liabilities and other relevant records to assess its legitimacy. 

Hiring a local legal and financial expert can help you navigate this part of the process. By the time you’re done, you should be able to decide whether the business is a sound investment. 

4. Read about local laws and regulations 

Each country has its own set of laws and regulations governing business acquisitions, so it’s vital to familiarise yourself with any legal requirements. These could include permits, business licences and registration with local or national authorities. 

It's important to comply with local tax laws, employment regulations and other statutory obligations, some of which might vary a lot from the ones you’re used to. While online resources can help you understand your legal responsibilities, consulting with an attorney in the region you plan to expand into may bring the most clarity.  

Step 5. Organise financing 

Most entrepreneurs have financing strategies in mind before they begin looking for a new business. However, life is notoriously unpredictable; for example, your plans may change if your chosen company is more expensive than your initial budget. 

Financing options include using personal savings, securing a loan from an international institution or a bank in your new location, or outside investment. Some business owners spread risk by taking a combined approach to funding.  

To support a loan application or secure investor funding, it’s wise to create a detailed business plan that outlines the business’s potential and your growth strategy. 

Step 6: Negotiate the terms of acquisition 

With due diligence complete and funding prepared, it’s time to negotiate the terms of acquisition. At this point, you should have a good picture of the company finances, any outstanding contracts and other nuances.  

The terms of acquisition include the purchase price, payment structure, transition period and other conditions of sale. It’s crucial to document agreements in writing and ensure they’re legally binding. Working with a skilled negotiator and legal representative can help you avoid common pitfalls and secure favourable terms. 

This may also be the moment to find a trustworthy and responsive escrow agent to help you make payments securely. During acquisitions, escrow agents hold funds on behalf of two or more parties while they finalise the terms of their agreement, releasing them when all conditions are met. 

Step 7: Close the deal 

The final step in buying a business for sale abroad is closing the deal. This is when you sign the purchase agreement, fulfil any remaining legal or financial obligations and take possession of the company. After the ownership of the business passes to you, it’s time to focus on a smooth transition. 

Step 8: Begin operating your new business 

To realise the full potential of your new investment, it’s vital to integrate the company into your existing business strategy. Being mindful of cultural differences and asking current employees to help you create a detailed operational and logistical plan can build trust and make the handover period easier.  

It’s also important to contact existing customers and suppliers to ensure they know about the change in ownership and what to expect from you. Cultivating strong, communicative relationships from the outset could simplify the transition and support long-term business success.   

Finding the right support for overseas acquisitions 

Buying a business abroad can be rewarding, offering new opportunities and expanding your global footprint. Because every business acquisition is different, the eight steps above apply generally rather than specifically. Before proceeding with a business purchase, it's essential to seek advice from an expert familiar with the law and market conditions in the region you plan to expand into. 

Along the way, you’ll almost certainly need to make secure cross-border payments to partners and advisers abroad. A premium Interpolitan multi-currency account, with personal service from a relationship manager included as standard, can help you do this. 

It’s also important to choose a trustworthy and competent escrow agent to safeguard funds while you finalise the terms of your acquisition. With decades of collective experience and a dedicated compliance team, Interpolitan escrow services operate globally, managing the secure transition of funds from buyer to seller. 

For more information about Interpolitan escrow services, including those tailored to special purpose vehicles and institutional investors, get in touch with us today.