Build your own business to secure the good life overseas
A new venture in another country could be the way to find the perfect place in the sun, says Rob Griffin
Saturday 30 July 2005
Quitting Britain for a life of luxury in a sun-drenched part of the world is a wonderful idea if you're financially comfortable, but the vast majority of people emigrating will need to find a regular source of income to survive.
An estimated 200,000 people will start new lives abroad this year, but a sizeable proportion of those will end up running out of cash and be forced either to search for part-time work or to cut their losses and return home.
However, increasing numbers of people are avoiding these problems by setting up overseas businesses in advance of the move. This will help keep them solvent and better able to enjoy their new lives.
So - what are the steps you can take to improve your chances of becoming a successful entrepreneur in your new country?
The idea of living abroad is seductive, but what will it be like in reality? Will you mind being so far away from your family and friends? Is the language barrier likely to be a problem?
You need to ask yourself these hard questions right from the outset, rather than realise too late that the lifestyle isn't for you, after investing your life savings in the project.
Speak to expats about their experiences in countries you may be interested in. If possible, spend a couple of months abroad to see how you will feel once the glow of a two-week holiday wears off.
WHAT ARE YOUR AIMS?
According to the international lawyer John Howell, of John Howell & Co, the huge numbers of people moving abroad at the moment can broadly be split into three categories.
The first group, in their mid-fifties, are retiring but need some extra cash to make life more comfortable. The second set have fallen in love with a particular country and need to find a suitable business to support their dreams.
The final - and currently the largest - group are made up of those who want to continue in their current trade, such as IT systems engineers, and are looking for the most suitable countries for that purpose.
"You need to plan properly from the start," Howell says. "So many people go abroad with a vague idea of what they're going to do, but you really need to be very sure of your plans. You might find that your business idea is not permitted in certain countries, or that it will require particular qualifications."
WILL IT ADD UP?
Estimate the likely costs you will incur when you are abroad, such as how much you will pay in taxes. Are there likely to be any hidden charges? Who will pay for healthcare? Where will your children be educated - and what are the expenses involved in this? How much money have you got to invest in your business, and will you be left penniless - or heavily in debt - if it doesn't work out? One option is to start off with a small project which has the potential to be developed gradually.
Marketing manager Christine Hemming, 28, from Manchester, is in the throes of buying a €140,000 (£95,000) three-bedroom detached house on the island of Brac, Croatia, with her family. Their long-term ambition is to set up a bed-and-breakfast business, as well as buying other properties that can be rented out to holidaymakers.
"There are plenty of opportunities in Croatia at the moment and you can get a lot for your money," she says. "We hope to complete the purchase of the house next month, which we'll use both as an investment and a stepping stone to finding other houses."
DO YOUR RESEARCH
Pete Ferns, the director of business banking at NatWest, says starting a company overseas will be one of the biggest moves of a person's life, so they need to do their homework.
"If they are flexible about their country choice, it is worth starting up somewhere where there is a shortage of their particular skills or a gap in the market," he says. "I would recommend they make several visits to the area to research the customer base, even if they have been trading in the UK with the same product for a number of years. This will also allow them to assess the competition and meet contacts."
For example, it's not worth setting up a restaurant if there are already 20 such establishments within a five-mile radius that are empty most nights.
Figures compiled by the European Union suggest that there are currently 780,000 Britons working abroad, which includes those who have started their own businesses, as well as those employed by someone else. Of these, 100,000 are in Germany, while 50,000 have chosen Spain and France.
According to Paul Keppler, the managing director of the real estate business Croatiansun, young people in search of a change of pace are a driving force behind the statistics. "They are realising that they can enjoy a better standard of living down in the Mediterranean, while the technology allows them either to work remotely for a company or to start up their own business," he says.
MAKING A PLAN
Every prospective company needs a proper business plan written in the particular style of the country involved. The type of document required in Italy, for example, may be very different to what is required in Britain.
Unfortunately, it is impossible to accurately compare the regulatory environment of the UK with other popular destinations without specialist knowledge, so professional help from solicitors and accountants is fairly essential.
For example, you will have to decide the most suitable structure for your business. While there are only a handful of options in the UK, countries such as France offer about 20 company structures. Choosing the wrong one from the outset could have potentially disastrous consequences.
EMBRACE THE CULTURE TO SUCCEED
Every country has its own way of doing business that you should find out about before taking the plunge. Even obvious factors such as when the public holidays fall and the hours people work can affect your venture. In parts of Asia, arriving late for a meeting will cause great offence.
Stephen Alambritis, the chief spokesman for the Federation of Small Businesses, believes entrepreneurs who have a thorough knowledge of different customs stand the best chance of success. "If you make the effort to understand the culture of business, then you are more likely to prosper," he says.
How the visa rules for the most popular destinations vary
Successful entrepreneurs have been actively encouraged to enter the country during the last couple of years. You will initially need to apply for a business skills visa (provisional) as a business owner, senior executive or investor. After successfully completing this period you will be able to apply for permanent residence.
* New Zealand
You can apply for residency under the business category, which broadly requires you to have enough money to establish your firm, to be suitably experienced in your chosen field and without any involvement in past business failures or fraud. To be considered you will also need to be healthy, of good character and possess a high standard of English.
* South Africa
A business permit will be required to establish and run a business in South Africa. Among the conditions that applicants have to meet are writing a detailed business plan, supplying proof that they have enough funds to support the venture and providing full-time employment for at least five citizens or permanent residents.
* Spain and France
Although there is free movement of citizens within the EU, you will usually be required to apply for a resident's card within 90 days for which you will need proof of ID, income and accommodation. Each country will also have formal structures and regulations that need to be observed. In Spain you will need to obtain a fiscal identity number (NIF) from the local police station, and a municipal licence once you have found your premises. In France, you will need to have a business permit before you start trading.
* United States
There are a number of employment-related visas that will allow you to live in the country. For example, the Immigrant Investor Visa is available if your aim is to set up a commercial enterprise that will provide at least 10 full-time positions for US citizens. Minimum capital of $1m (£570,000) may be required.
The kids have grown up, and it's time to talk Turkey
Lesley Kilborn and her partner Steve Ansell, from Northampton, are a good example of people who are realising their dreams of moving overseas by setting up their own venture.
Once their children were independent, Lesley and Steve began harbouring dreams of moving to a warmer climate, but they were not sufficiently well-off financially simply to give up work and retire overseas. They also thought they might get bored with nothing to do.
The couple, who plan to get married later this year, are now buying a property in Turkey through the property developer Headlands International.
At the same time, they are also investing in a piece of land on which they plan to set up a clay-pigeon shooting business to boost their income.
"We have been talking about this plan for the past six months, and have decided that now is the right time to live abroad permanently because our children are all grown up," says Lesley, 51, a store manager.
"We chose Turkey because it has a lovely climate, lovely people and great food, and the cost of living is low."
The move will be funded by the sale of two of the three houses they own between them in the UK.
The remaining property will be retained just in case they eventually want to return to Britain in the future. The couple both think it is a good idea to have something on which they can fall back if their plans do not work out quite as expected.
"We wanted to do some kind of work rather than just sitting around all day, and there seemed to be a gap in the market locally for clay pigeon shooting, something in which Steve has been involved for a number of years," Lesley adds.
"We just can't wait to move out there now - and our families are up for it as well, because they are looking forward to cheap holidays."
Cottage industry in a lovely corner
It has been five years since Denis and Paula Coombes started their bed and breakfast business within a cottage in Brittany in northern France - and despite some setbacks along the way, they insist it has been one of the best decisions they have ever made.
The couple bought the La Rabine ( www.larabine.com) near Pontivy in Brittany for £14,000 back in the mid-1990s and then had to spend a further £20,000 over the next few years renovating the property before welcoming guests through the front door.
"The main attraction for us was the relaxed attitude to life in France," says former telephone engineer Denis, 56. "As long as you can cope with things such as the shops being closed for a couple of hours at lunchtime then you will love it."
However, it hasn't all been plain sailing for the couple. The number of Britons buying their own properties in France over the past couple of years - and allowing their friends and family to stay there free of charge - has had a major impact on their business.
This recent downturn in the local bed and breakfast business was a factor in education consultant Paula setting up another business, the internet firm, www.face2face.fr through which she offers teaching and translation services to individuals and business clients.
"We decided the best idea would be for me to go self-employed as during our time here I had become virtually bi-lingual," says Paula, 49. "I decided to start working as an English teacher and then began acting as a consultant to help Britons who can't speak the language. I also do some work for the local chamber of commerce."
The couple, who are originally from Sussex, say the best advice for anyone wanting to follow in their footsteps is to sit down and write a proper business plan together. It is also crucial to make sure you have the resources to put your plans into action, the Coombes suggest.
"To be successful you need to research what you're planning to do before you get started and then have the means to back it up," adds Paula. "People need to be realistic about what they can achieve on the budgets they have."
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
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