REASONS TO INVEST IN LOCAL KNOW-HOW IF YOU ARE AN EXPAT
Linking with local know-how (business partners or local workers) is essential to the success of new ventures in the African continent.
Today Africa is one of the most attractive markets for entrepreneurs. While investing in developed world will give very small returns investing in rapidly growing economies of Africa can give massive returns on investment. So as an expat you may consider investing in ventures in Africa. But for a successful venture, you will need to link with local know-how (business partners or local workers).
Why You Should Invest In Local Know-How
- To comply with regulations – many African countries have strict ownership rules such as at least 51% of any venture should belong to a citizen or to an African company. The reason for this is to avoid companies from closing shops and moving money out of the country whenever they want. TO comply with these regulations an African partner becomes essential.
- To utilize existing connections – As an expat you not have a wide network of connection in the African country. In developing nations where the laws are still in a state of flux, having connections can get work done easily. In these situations if your partner has a wide network you can always find someone who can grease the wheels for a faster turnaround.
- To face the local officials and vendors – For any official work in developing countries, bribery is a universal practice. To get the wheels of bureaucracy moving a little gift in cash or kind helps. If you cannot speak the local language or look like you are out of down the asking amount can increase by many times. Most people think that every expat who wants to start a business is a millionaire and has unlimited funds. If your partner is a local he knows what the standard rate is and can negotiate accordingly with the officials.
- Cultural integration – When you move to a new country there are different customs that you may not be aware of. In such cases it’s always better to follow somebody’s lead who can guide you through the local customs. Also in many societies a lot is left unsaid in conversations but implied. A local can pick these cues where you may be completely oblivious to them.
- Understanding the work culture – A local partner can help you understand how people work in that country and which rewards or punishments work. For someone who comes from a western country most African workers may seem laid back and chatty. This is an inherent part of African society which has different culture than Western countries. People have closer ties to colleagues than in the west and can speak to them as friends. For someone coming from the west this may seem weird at first. Also things tend to move a lot slower in Africa than in developed countries. The processes are not always well defined and there is a lot of scope for interpretation. This may seem unsettling to expats at the start as they are used to orderly processes and cannot deal with uncertainty.
There are many more benefits of having an African partner or local workers if you are an Expat. But the main reason you should find one is that it may significantly increase the chances of your success.