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Expanding by selling abroad

  • 17-07-2012 11:57am
    #1
    turbobaby
    Closed Accounts Posts: 927 ✭✭✭


    Hi all,

    I'm working with a small software company in Ireland and we are a market leader in our field but only sell in Ireland. We are now looking to expand abroad (EU) and will soon get legal advice regarding tax etc.

    Before going into the meeting I wondered if anyone here could clear up the basics for me, someone who may already be selling abroad. Our software is purely digital, no packaging etc.

    1. Should we receive payments into our Irish company bank account, or do we need to set one up abroad? We can easily set up a sterling account here too.

    2. Do we need to set up a company and register our business abroad? We plan to have a local website domain but it's not necessary.

    3. How do we deal with VAT?

    4. Are there any other obvious tax issues?

    5. Is there anything we need to do to protect our product before we start to sell abroad?

    6. Can we use the same terms and conditions or do they need to be modified for each target country?

    7. The Irish company will invoice the customer abroad, is that standard?

    8. Under which country's laws will the customer contract be governed?

    Looks like a lot of questions, but even simple one word answers would point me in the right direction. I will post the feedback from the lawyer when I get it, but I want to go in better prepared so I can use my time with him wisely.


Comments

  • #2
    JD Dublin
    Registered Users, Registered Users 2 Posts: 401 ✭✭JD Dublin


    I am selling software in non-EU countries where I have established relationships. I am interested in working with software companies here on an agency basis. I can open up new markets for Irish companies, if you are interested. PM sent.


  • #3
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    Firstly, I assume you are not going to take on the whole EU from the outset!! That would be madness and you are unlikely to do any of them well. The obvious first step is the UK.

    As an Irish software producer you can access all the supports of Enterprise Ireland and they have plenty of market specific advice and guidence for free!! The answers to many of your questions really depend on how you are going to set up in/for each market and how you propose to support it.

    The best piece of exporting advice I ever got when we were starting out in export markets 20 years ago.... Try France last!!

    Good luck with it

    Peter


  • #4
    Gloomtastic!
    Registered Users, Registered Users 2 Posts: 8,833 ✭✭✭Gloomtastic!


    Peterdalkey wrote: »
    The best piece of exporting advice I ever got when we were starting out in export markets 20 years ago.... Try France last!!

    Good luck with it

    Peter

    Why was it the best advice? Was it just relating to your product/service or exporting in general?


  • #5
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    Gloomtastic! wrote: »
    Why was it the best advice? Was it just relating to your product/service or exporting in general?


    Because the French are so nationalistic, if it is not a French product, they seem to reckon they dont need it.
    For the same effort and expense, much greater returns can be had in UK, Gerrmany, Benelux, Scandinavia and even Spain and Italy. Our own experiences have proven that to be dead on the money, though we still do some business in France.

    Cheers

    Peter


  • #6
    turbobaby
    Closed Accounts Posts: 927 ✭✭✭turbobaby


    Peter, thanks for the comments and I absolutely hear what you are saying about the French. Indeed the UK is number one right now, but we have another market in mind.

    Enterprise Ireland should be a good resource for us.

    As we are very busy developing we are without localisation, marketing, sales and support resources, but we have an excellent and trusted partner who will look after that for us. They are also based in Ireland.

    Although our partners will be the face of our company abroad, should the sales contracts, invoices and payments be between us and the new clients, leaving us to have a separate agreement with our partner.

    Basically we've exhausted the Local market and lack the sales skills to go abroad so they will do all that for us. What kind of fee should they be getting? Marginal costs are minimal.

    Ta!


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  • #7
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    turbobaby wrote: »
    Peter, thanks for the comments and I absolutely hear what you are saying about the French. Indeed the UK is number one right now, but we have another market in mind.

    Enterprise Ireland should be a good resource for us.

    As we are very busy developing we are without localisation, marketing, sales and support resources, but we have an excellent and trusted partner who will look after that for us. They are also based in Ireland.

    Although our partners will be the face of our company abroad, should the sales contracts, invoices and payments be between us and the new clients, leaving us to have a separate agreement with our partner.

    Basically we've exhausted the Local market and lack the sales skills to go abroad so they will do all that for us. What kind of fee should they be getting? Marginal costs are minimal.

    Ta!

    I would not dare to advise you on margins as I have no knowledge of the software industry. However you do know the market price it sells for here. Your partner will need one margin, or two margins if he is selling on through local distribution. I would guess he would need about 50-60% off RSP, but EI should be able to assist with more accurate industry norms.

    I would respectfully suggest that you guys need an industry veteran mentor to guide you. Again EI can help or vist www.mentors.ie. I am not a huge fan of EI for our sector, they have no skill base or market intelligence but I understand this is not the case with software or food businesses . A good mentor who can guide you could save you immense grief and bring great international market knowledge, but like choosing a wife, take great care!

    Best of luck with it

    Peter


  • #8
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    I was talking to a chap I know last night who does work with 3 different Irish software companies. I asked him about Enterprise Ireland and he agreed that they are pretty decent on the software sector, if rather bureaucratic to deal with, huge volmes of paperwork and business plans. He gets most of his introductions through EI to these software companies, as EI look to established insdutry experts to get their views on a particular project. He has a couple of guiys that he subs out the paperwork to and reckons it save a bundle of time and money in getting funding from EI.

    Cheers

    Peter


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