Most people would think of putting up a business in the same country where they live in and least likely to consider doing business overseas unless – it is a very large business like a corporation.

Doing business overseas is an option for most large corporations who are either starting a new business or expanding their established business. But both types have things to consider first before deciding to take their business offshore. Generally, the economic and political environments of an overseas location are the prime considerations.

To gain great advantage in taking your business overseas, one can exploit these three factors – labor, raw material, and tax holidays. Cheap labor is the most popular reason for doing business overseas especially if a company is labor intensive and labor is its biggest expense. Countries in Asia including China offer the lowest labor around the globe. Next to labor, businesses locate themselves near the countries where their raw materials are abundant. If a business’ raw material is very expensive and/or transport costs are overwhelmingly high, the company can gain a lot of savings by locating itself near these supply sources. And lastly, tax holidays, tax exemptions and other economic policies can also make the biggest difference especially for a starting business or an expanding corporation. A tax exemption is the number of years that a business will be exempted from paying taxes beginning from its start up date. It would be wise to select a location that has good economic policies, better tax holidays, and longer tax exemptions. In Vietnam for example, the tax exemption spans five years for new business investments. China plus other developing countries in Asia offers competitive economic policies.