Expansions are a brilliant way to increase your assets. It becomes a way for businesses to increase revenue and profit by venturing into different countries. When investing in foreign markets, it brings in a lot of opportunities for growth and success. Green field investments are a common way of efficiently entering new and robust markets. However, it is essential to know how the process works and how entrepreneurs should handle the problems.
The Shikana Group is here to make your expansion successful with their guidance and advice. With an experienced team behind them, you can prosper high.
What Are Green Field Investments?
A greenfield investment is a type of foreign direct investment where a company opens its business in another country. This type of expansion is how companies earn the title of being multinational. Multinational enterprises receive plenty of benefits and advantages that are immeasurable. Green field investments are labeled as ‘green’ because of their structuring. For a company to invest in green fields, the building has to be built from the ground up.
The company’s structure must be made from scratch for it to be considered a green field investment. When a business wants to increase its market share and push boundaries, investing in a foreign market is the best way to do so. There are numerous advantages that can come out of a green field investment. In order to know more, keep reading.
Benefits Of Green Field Investments
1. Increase in economies of scale:
Having economies of scale in your business gives you many benefits. These are based on the 5 leading economies of scale:
- Financial
- Purchasing
- Technical
- Marketing
- Managerial
These factors ultimately elevate your status in your industry and give you opportunities for better operations. When you accumulate enough power and strength to have economies of scale, you may be able to work more efficiently. Investing in a foreign country gives you enough possibilities to expand your productivity and operation within the company.
2. Increase In Revenue:
A business can see an increase in revenue when they expand its operations. This happens because your services and products become more accessible to customers and raise awareness. With this, you can witness more profits and revenue as your customer total increases.
Green field investments enable the opportunity to elevate your status and the value of the company. Moreover, businesses can have more footfall and traffic in their operations as they expand into foreign markets and have the chance for further marketing and awareness.
3. Higher level of control:
When you have the opportunity to make your new branch from the ground up, you effectively have control. This control is necessary when expanding into foreign countries as it can get challenging to oversee operations from your head office. Therefore, it is a wise decision to invest in green field schemes.
How Shikana Group can help
Shikana advises clients on the appropriate ownership structure for the business they want to set up, including corporations, partnerships, limited liability companies, and joint ventures. We analyze the benefits, costs, and risks associated with the choice of a particular business entity based on our extensive experience assisting foreign investors coming into the African marketplace.
We also provide a full range of services related to immigration and labor law, including liaising with relevant Government authorities for work permits, investor permits, and related matters. We use our unmatched experience to deliver efficient and transparent legal and investment advisory support for our clients.
Our firm offers services in the following domains:
- International trade and taxation
- Commercial and business law
- Compliance
- Venture Capital and Private Equity advisory services
Contact us for legal advice you can believe in.