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Published by the CIPS Network of the National Association of REALTORS®
First Quarter 2004
Venturing Abroad! So you want to open an office in another country. . .
By John E. Starke, CIPS
It's really quite easy-you select a country, pick your favorite city in that country, and find an office space to
rent, right? Well not exactly. It's not as difficult as you might imagine, but it does require preparation.
Perform your due diligence
Approach the task from a thorough business planning perspective. Perform your advance research just as you would do your personal annual business plan. Create a specific plan outlining all the pertinent steps. When you know your time frame, begin by analyzing the most logical countries for you to consider by asking yourself some questions.
Your most critical decision-What country makes sense for me?
- What is my national descent?
- What foreign languages do I speak?
- Where do I vacation outside the U.S.?
- What country or countries am I most familiar with?
- Do I have relatives or friends living outside the U.S.?
- Do I know anyone who often travels to another country?
- Where would like to live for part of the year?
- Would I like to retire in another country?
The business climate-Does it mesh with my goals?
- Does the government allow foreign real estate operations?
- What official documents are necessary and how easy are they to acquire?
- How long is the document acquisition process?
- What is the proper protocol?
- What is the cost?
- Does the country maintain an official central property register?
- Is the country a member of ICREA?
- Does the government allow the transfer of earned income abroad?
- What is the tax structure?
- How safe is the country for Americans?
When, and only when, you have accurate information and satisfactory answers to these questions, and have determined you have found a viable business climate, are you prepared to move to step two-acquiring operational data through research and investigation.
Do your research
More useful country-specific data and information exists than you can possibly assimilate and effectively process. Limit your inquiry to those areas and items that are truly pertinent to the success of your plan. Following are just a few possible sources of information for you to explore:
- Go to your local public library or the library at a local college or university. Ask if the library has a "Culturegram" for that country. My state, Colorado, produces a piece entitled "Protocolorado" for most foreign countries that can be obtained through the Office of Economic Development.
- Mine the Internet. Be selective, however, or you can spend the rest of your real estate career gathering data here.
- Call your Congressman. Ask for assistance in assembling pertinent information contacting the Embassy for your selected country.
- Write or call the Embassy and request a copy of the "Ambassador's In-Country Report," an annual report detailing much of the information that will impact your decisions. It's public domain and is usually free of charge.
- Read newspapers from the country/city you've targeted to acquire a feeling for the current political, economic, and business climate.
- Research U.S. newspaper travel sections for hot areas in your country/city of choice.
- Familiarize yourself with the overall economic situation and growth projections.
- Subscribe to popular magazines in the country you've selected.
- Locate CIPS designees in your chosen country/city and call them. Be considerate of their time. Have your questions written down and keep to business.
Next, organize the information in commonsense categories. Then sort through each group and extrapolate only that which is pertinent to your objective. Once done, logically sequence the data into what will become your outline for the final product-your foreign office business plan. You are now prepared to begin drafting the formal plan that will be your guide to success.
One final decision to make
You have one more critical decision to make before you complete your written plan: Are you willing to go it alone or would a partner help insure the success of this venture for you?
If you have a friend or acquaintance who knows the country you've targeted, perhaps is fluent in the language, who would welcome the opportunity to join in your venture, approach him or her, and if there is interest, make him or her a part of the planning process to ensure agreement on goals.
Ask yourself if you want to recreate the wheel or ride in someone else's wagon? Buying a franchise from a major player with international experience and major funding can greatly simplify the process and the risk.
A third possibility is to visit your chosen city and spend time investigating existing real estate operations. You may find someone with similar business sensibilities with whom you can form a partnership-giving your partner an alliance with an U.S. firm and you the benefit of joining an existing operation eliminating the risk of going it alone and giving you the freedom to travel back and forth at will.
An easy conclusion!
There are many more questions to answer and more matters to address, but the process described above will get you well on your way to increasing your business-and profits-through expansion into an international real estate operation. If you do it properly, it can be a rewarding venture. And, lots of fun!
John E. Starke, CIPS, is CEO of RealtyPro USA Ltd., in Highlands Ranch, Colorado. He has authored and taught some thirty courses, seminars, and workshops around the U. S., traveling extensively as a professional speaker. He is a specialist in the Americas, Taiwan, and the UK. He now has an office in Cabo San Lucas, Mexico with a partner, Jay West. Check out Cabo Realty at www.cabohomes.com. E-mail John at John@realtyprousa.com or call him at +1.303.791.7150.
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