International business refers to any commercial activity that takes place across national borders. There are several ways to internationalize your business. Companies can choose from these five basic activities to get started.
- Import and export
Imported goods: Goods or services brought from one country to another.
Export: Goods or services produced in one country are sold in another country.
This is often because imports and exports are the most basic and largest international business activity and the easiest way for a company to enter the market with low capital expenditure when deciding to expand abroad. business setup in the UAE is the first choice.
Licensing is one of the other ways to grow your business setup in the UAE. A license is an agreement between one company, called a licensor, that allows another company to use intellectual property such as brand names, copyrights, patents, technologies, and trademarks for a period of time. Specific time Licensors make a profit in terms of loyalty. If the country’s production costs are too high, strict government regulations or the company wants to sell and produce standardized products everywhere; the company can choose to sell the products under license.
Franchises are closely tied to licensing. A franchise is a parent company (franchisers) that gives other companies (franchisees) the right to do business using the franchisor’s name and products in a prescribed manner. Franchises differ from licenses in that franchisees must follow much stricter guidelines. Also, licenses are about manufacturers, and franchises are more popular in restaurants, hotels, and rental services.
- Strategic partnerships and joint ventures
Strategic partnerships or alliances are a positive aspect of the cooperation of two or more companies from different countries that have mutual benefit. A joint venture is a special type of strategic alliance in which partners from around the world collectively form a company to produce goods and services. Collaboration between companies allows us to share the costs of production, technology, development, and sales networks. Resources are combined for mutual benefit, putting the company in a favourable position for both parties. For example, Motorola and Toshiba are participating in a strategic partnership to develop a microprocessor manufacturing process.
- Foreign direct investment (fdi)
Companies are practicing FDI and benefiting from cheaper labour costs, tax exemptions and other privileges abroad. The host country will benefit from the introduction of new products, services, technologies and management skills. In addition, FDI helps promote progressive reforms of the host country’s domestic politics and improve economic conditions.