Unlocking global markets with robust regulatory roadmaps

Businesses are looking to grow their operations and open new markets abroad even as they face continued geopolitical, economic, sustainability and technological challenges. In our C-suite Barometer, 94% of executives expected their business to grow during 2024 and 25% were actively eyeing global expansion with Europe, the USA, and China identified as the top growth opportunities.  

Yet even as executives express their optimism for international expansion, they must navigate their way through an increasingly complex regulatory landscape where different countries, regions and industry sectors are setting strict agendas. 

Some of the regulations faced by companies looking to expand internationally – around tax or finance laws for example - will be very familiar to most businesses executives no matter where they are located. Other forms of regulation, however, such as new rules around sustainability or technology compliance, will be a completely new concept for many businesses. In the last few years, jurisdictions all over the world have introduced new regulations to tackle growing 21st century trends such as cyber security, anti-money laundering, digital banking, climate change and the rapid growth of artificial intelligence. 

A spotlight on Europe  

Europe has been particularly proactive in strengthening its regulatory frameworks – setting the benchmarks that companies looking to operate in the EU must achieve and also helping them prepare for compliance in other jurisdictions. This is particularly relevant for Chinese companies expanding into Europe, because, in general, compliance in the APEC region is less stringent than in Europe. Compliance will always be more complex in Europe than in other parts of the world. On the one hand, because there are many new laws and regulations - especially in the areas of climate, sustainability and technology. On the other, because each member state in the EU has its own national regulations. 

‘From C-level management, Chinese companies need to realise that regulatory compliance in the EU is more complex and complicated, for example on ESC and Pillar 2, than in APAC,’ said Yang Liu, Tax Consultant and part of the Global China Desk in the Netherlands. ‘And that they therefore also spend more time and budget on understanding European regulations. It is important that their audit and accounting work is in line with regulations.’ 

When entering into a new market, many chinese companies often first rely on “guanxi” e.g. to follow the advices from a trusted person in their network. For a sophisticated investment in Europe, one should first obtain professional advices and update from legal and tax professionals on ESG topics 

Sustainability as main challenge 

Their focal point will be complying with the new requirements of the Corporate Sustainability Reporting Directive (CSRD). For many companies unfamiliar with sustainability reporting, that will involve training new people, hiring new talent, creating new departments and implementing new internal control processes. The Sustainability team of Forvis Mazars can guide Chinese companies through the CSRD road map. In particular, we are focusing on the Chinese EV brands, which is the most developed industry in China. 

Whatever the type of regulation, and wherever it is being applied around the world, it’s clear that companies need to plan carefully and do due diligence on the best ways to achieve compliance while successfully growing their business. That involves finding good local partners who can offer trusted advice and understand the nuances not just of the regulation but also of local cultures and ways of working.  

Forvis Mazars can help you 

“Our seamless integration ensures a single point of contact and consistent methodologies everywhere, ensuring tailored service and flexible coordination, fast and efficient between your team and our multilingual and multicultural experts around the world.” 

– Cindy Cappia, Forvis Mazars International Desks 

For those expanding beyond just one jurisdiction, it is becoming increasingly important to have a multinational perspective on regulation so that the investment being made, and the information being gathered, in one jurisdiction can also help meet the different (but often similar) requirements of other countries. 

As regulation becomes more complex in more jurisdictions, this combination of forward-looking horizon scanning, working with people you trust, and taking a multi-jurisdiction view of compliance will help companies grow both globally and successfully.