The creation of a global economy based on the free movement of people and especially investors who can open companies in more than one country is very advantageous for both enterprisers and consumers. However, starting a company in a new country often implies certain risks which can be lowered by a thorough market analysis, feasibility studies, review of the legislation and taxation system, and a good marketing plan.
One of the aspects most enterprisers stumble upon when opening a company in a foreign is the licensing phase which can imply several steps and various approvals from different authorities. No matter the country, business licenses are usually granted depending on the main object of activity in the respective state.
General business licenses
The general business license is mandatory in every country and it is usually released upon the registration of the company. Obtaining such license implies registering the company with the local chamber of commerce and tax registration offices in most countries around the world, however there are also states which issue these permits separately. One of the best examples is Malaysia. Both local and foreign investors setting up companies in Malaysia must obtain the general business license separately by submitting certain documents. Therefore, the general business license is called permanent business license.
In Europe, such license is usually issued once the company registration process is completed without any additional requirements or special procedures. From this point of view, Spain is representative as the authorities there have simplified the business licensing process several times during the last few years so that it is easier for foreign enterprisers to comply with the local legislation. Those who open companies in Spain will obtain their business licenses with the municipal authorities in the city they will operate in.
Licenses for special activities
Another general rule is for certain professions to be recognized by the competent authorities or associations which will issue special licenses for conducting such activities. Accountants, lawyers, doctors, architects are among those who must have their degrees equivalated in other countries in order to be able to offer their services there. In some countries, these will imply obtaining special permits, such as professional licenses before starting practicing.
Construction works also fall under the same special license regulations and it is good to know that each country has its own norms related to safety, materials and the protection of the environment. The same applies for those involved in the waste management sector. The licenses for such activities are usually granted by the local municipalities in every country.
Import and export licenses
A special category of licenses are the ones related to trading activities. This is because most companies nowadays take advantage of the global economy mentioned above and export their products to as many countries as possible. They also import other products which are demanded on the local market.
If we are to use the same examples of Malaysia and Spain, the import and export procedures are similar up to the point that clearance from the Customs Authorities for the merchandise brought, respectively, sent from the country is necessary. Taken apart, special impositions and licenses are required for certain products imported by companies in Malaysia, as the authorities here are very strict.
Spain, on the other hand has signed various free trade agreements which enable companies here to benefit from simplified import/export procedures. On the other hand, Spanish companies involved in trading activities must comply with the European Union’s requirements related to certain products which need special approvals or need to meet certain standards in order to be imported or exported.
Business licensing is not necessarily complicated, however it requires a deep understanding of the laws of the country in which the company will operate and previous study of all the licenses connected to the business’ operations.