A venture started in the U.S. can focus on one small community, a large city or state, the entire nation, or most parts of the world. You may need additional legal permission to work in certain nations where different business, NGO, and tax laws may apply. Your venture must be registered in one location for regulatory and tax purposes, but it may hire employees, obtain materials, or manufacture products in other states or nations. The markets for your products or services may or may not be in the same location as your registered headquarters. The narrative and links below provide examples to help you think of the scope of your proposed venture.
In the United States, the responsibility for registering businesses and non-profits falls to individual states. You need to select the state whose legal and tax framework will apply to your venture. For example, many companies incorporated in Delaware because of their favorable tax structure. You may also locate close to your sources or your market. Apple and other high-tech companies have a massive presence around Austin, Texas, because of the ready availability of highly-educated employees. You may want to locate in centers of economic, entrepreneurial, or technical interaction and innovation like New York City or San Francisco. Your entity is also subject to federal regulations and taxes, but you have no control over that. Within the U.S., non-profit charitable foundations often only donate to 501(c)(3) non-profits. To donate to a non-profit entity outside of the U.S., you may be required to demonstrate through the U.S. State Department that the receiving entity is legally a non-profit.
There are similar reasons to locate all or part of your venture in a different nation. Apple had a huge facility in Ireland to take advantage of favorable tax laws, and Tesla has built a gigafactory near Shanghai, China, both to be close to the Chinese market, and also to avoid high tariffs on importing to China from the U.S. But there is a big caution in registering your venture outside of the U.S. One of the factors that has enabled the U.S. to foster so many businesses compared to other nations is that it is relatively easy to start a business in the U.S. In many nations, there is more legal paperwork, sometimes long delays, high licensing fees (that’s Dubai!), and sometimes corruption and graft. The court system is another factor in location. A prompt, fair justice system gives investors and CEOs confidence that their business interests and contracts will be respected in nations like the U.S., Canada, Germany, England, and Japan. Court systems in parts of Africa, Russia, Venezuela, and any others are not reliably fair and honest to protect your business interests.
The highest-impact ventures may focus on least-developed regions because their needs are the greatest and they have so far to go to reach healthy economic stability. Here’s an example from Africa describing a venture training Rwandan men and women in marketable skills. Note the comments and involvement of Jeffrey Sachs, a highly-respected Columbia University professor and expert on reducing severe poverty worldwide. Here’s the 6-min video from the Earth Institute titled Sustaining Business in Mayange, Rwanda: https://www.youtube.com/watch?v=gLbaf2jAeB8
Jeffery Sachs, in his book, The End of Poverty, only recommends charitable donations to nations with stable governments and courts. Otherwise, your contributions may end up in the accounts of government officials or regional warlords. But there is another mega-reason to think internationally when starting a business or non-profit venture. That reason concerns the rapid economic change brought on by political upheaval/instability and by exponential technological change. Regional and national economies change, and businesses change, too, and sometimes contribute to the change. Consider today’s most favorable markets as indicated by the ten nations with the highest Gross Domestic Product (GDP), the sum of all the production and sales in the nation:
In the animated chart below, note the outsize GDP of the U.S. and China compared to the rest of the world after 2010. Note, initially the top four nations are what you would expect, with few surprises in the rest of the top 10. Projections over the next 8 years to 2030 initially expected China and India to grow, but the U.S. would retain its leadership a bit longer. There’s a strong chance that China and a reasonable chance that India will surpass the U.S. economy in the 2030’s. Expect European nations to decline in relative prosperity while Brazil, Indonesia and others may improve dramatically.
The chart below was published in 2019 by the UK firm BusinessInsider with updated projections of national economies in 2030. Try to process the changes. Note that China’s economy is DOUBLE that of the U.S. and that India’s GDP is 50% higher than the U.S. If that’s not shocking enough, look at Japan and Germany in positions 9 and 10! Indonesia is number 4, with Turkey, Russia, and Egypt in a near tie. Successful enterprises anticipate these massive changes and act on them early. Can you see that more economic growth is expected in China and India that in the rest of the world combined? Is that why Tesla is building their next gigafactory in China? Why Lehigh is partnering with an Indian University? How might your venture take advantage of the e
This dramatic change in Asia ruling the economic world may seem far fetched. Here’a 4-minute animation from earlier data that shows less dramatic change, but we can see it unravel year-by-year. Economists roughly agree on the overall change, but they differ on the details. In general, they see national economies becoming more aligned to the population of each nation. That population, alone, with each person becoming proportionately more economically active, accounts for most of the change. Here’s the animated video: https://www.youtube.com/watch?v=T9l2yCH5wBk
Successful enterprises anticipate these massive changes and act on them early. Can you see that more economic growth is expected in China and India that in the rest of the world combined? Is that why Tesla is building their next gigafactory in China? Why Lehigh is partnering with an Indian University? A child entering kindergarten today will graduate from high school with many nations rising or falling significantly. The biggest change will be in the massive growth of markets for goods, for education, for travel, and services. How might your venture take advantage of the these changes. This change is only a decade away!