NEWS RELEASE

27 October 2014

8 in 10 US companies look to Asia and Europe to expand sales

As the US economy becomes more confident in its recovery, 82% of US businesses are now looking
overseas in a bid to grow sales.

According to a new study conducted by IDC and commissioned by TMF Group, a leading global
provider of high-value business services, nearly half of the companies questioned (48%) were looking
to grow internationally in the next two years primarily to Asia Pacific (42%) and Europe (36%).

Eight out of ten respondents (82%) cited increasing sales as among their reasons for international
expansion, followed at some distance by establishing a shared service center for back office
functions (25%).

The most popular territories under consideration for future expansion were the UK and Germany
(Europe) and China and India (Asia Pacific).

The US economy was one of the first recessionary economies to return to growth and this early
domestic market recovery has meant that US businesses, having stabilised their existing business,
are now in a better position to consider international expansion in other regions ahead of their peers
particularly those headquartered in Europe, explained John Simcox of IDC, author of the report.

Fifty in-depth interviews were conducted with senior level decision makers at US-headquartered
organizations that have set up, or are setting up, operations in new jurisdictions. The interviews
examined views, experiences, and challenges faced when businesses are entering new countries as
well as best approaches and key considerations when expanding internationally.

The organizations came from a range of industry sectors including high-tech and luxury consumer
goods as well as financial and professional services, travel and logistics and biotech and
pharmaceuticals. Companies ranged in size from approximately 500 to almost 23,000 employees.

Respondents were drawn from senior roles closely involved in the day-to-day management of
territorial expansion: chief financial officers (22%), senior HR executives (32%), chief operating officers
(24%) and senior legal officers (22%).

The growth of online commerce has not negated the need for an on-the-ground presence in
international markets, explained Dennis Day, Head of Strategic Alliances at TMF Group. The reality
is that people still buy from people and this requires physical presence in key target markets, if
maximum sales potential is to be realised.

He continued: US brands have strong appeal, especially in the aspirational emerging market
economies and this creates a strong business case for US-based businesses to expand. However,
that can be a time-consuming and expensive process be it, finding the right people or
understanding business regulations and the risk of failure can be high if appropriate planning is not
made or local practices considered.

Thats why TMF Group commissioned this research. We wanted to understand what the key drivers
were for US businesses to grow internationally, and to offer practical guidance on what to expect
and how to overcome some of the more common challenges and barriers to success.

He concluded: Its important for companies to realise that they are not alone. Everyone faces these
same challenges but there is help out there and practical measures that can be taken to avoid any
pitfalls.

To download the full report Taking the fear out of international expansion for US companies visit
www.tmf-group.com/idcreport2014

The report found that some of the key challenges encountered during international expansion
included:

1. Finding the right people

The prime issue for US businesses entering new territories is to find, hire and train the right staff.
Not understanding the local culture when it comes to recruitment and addressing this lack of
empathy in some locations where high staff turnover is the norm is a challenge when it comes to
establishing a business in a new country.

2. Keeping on the right side of the law

Working with and understanding the legal processes and regulations in the new location are also
seen as a significant issue for businesses in establishing their new operation, especially when trying
to ensure they fit in with the way the rest of the business operates.

In particular, the importance of getting the accounting processes and procedures right (including
payroll) seems a greater challenge than corporate governance, and is seen as time-consuming,
expensive and difficult to change later if done incorrectly.

Consequently, 91% of respondents said they would look to engage external expertise, with payroll
related services the most common area where a third party would be used.

3. Finding the right local support

In the case of both finding the right staff, and keeping on top of legal requirements, nearly two-
thirds of respondents (64% and 65% respectively) look to work with local partners. However,
working with third parties can also present its own challenges in finding the right supplier and
managing any associated costs.

In helping companies to meet these challenges the report offers two clear recommendations:

A. Do your research

Start planning early and research the specifics of the territorys political, legal and cultural
environments, as well as into the competitive landscape and the target market and / or workforce.

B. Consider local experts

Give serious consideration to using third parties with a strong local presence, particularly in the early
stages of territorial expansion. Third parties include IT and business process outsourcers, as well as
corporate compliance services suppliers that ensure new subsidiaries are properly constituted and
remain compliant with local legal and working requirements.

It might be beneficial too, to select a partner that operates across more than one location to smooth
the transition to further markets should that be your long-term goal. Likewise, a company offering
multiple services under a single agreement is likely to be more cost effective and deliver a higher
quality and more integrated service.

ENDS

Notes to Editors:
For further information, please contact:
Justin Griffiths, Karen Le Cannu
Powerscourt
Tel: +44 (0) 20 7250 1446
tmf@powerscourt-group.com


Research methodology
In summer 2014, IDC conducted 50 telephone interviews with senior level decision makers at US-
headquartered organizations that have set up, or are setting up, operations in new jurisdictions. The
group was comprised: 22% Chief Financial Officers, 32% Senior HR Executives, 24% Chief Operating
Officers and 22% Senior Legal Officers. The interviews examined views, experiences, and challenges
faced when businesses are entering new countries as well as best approaches and key
considerations when expanding internationally. The organizations interviewed came from a range of
industry sectors including high-tech and luxury retail as well as financial services, professional
services, travel and logistics. Companies ranged in size from approximately 500 to almost 23,000
employees.

TMF GROUP
TMF Group helps global companies expand and invest seamlessly across international borders. Its
expert accountants and legal, HR and payroll professionals are located around the world, helping
clients to operate their corporate structures, finance vehicles and investment funds in different
geographic locations. With operations in more than 80 countries providing outsourced compliance
services, TMF Group is the global expert that understands local needs.

IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make fact-
based decisions on technology purchases and business strategy. More than 1,100 IDC analysts
provide global, regional, and local expertise on technology and industry opportunities and trends in
over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the worlds leading technology
media, research, and events company.