Expanding into Europe is no simple feat for foreign companies. Its rich diversity of cultures, languages, and regulatory environments requires a strategic approach for communications and running business – considering market nuances, local cultural preferences, and a careful eye on current and future regulations.
If done correctly, businesses gain access to a large, diverse customer base, strong purchasing power across many markets and industries, and highly-educated talent pools – all backed up by consistent regulation and state-backed incentives.
Here are some essential tips to help foreign companies make a smooth transition into the European market.
1. Understand the regulatory environment
One of the first steps when expanding into Europe is to understand the regulatory frameworks that govern business operations. The European Union (EU) has harmonised many regulations, especially regarding product standards, data protection (GDPR), and consumer rights.
However, member states often still have specific local rules, such as employment laws, which are often more stringent than the US, as Elon Musk found out in 2022 after illegally firing German Twitter employees. Working with legal advisors who specialise in European law is essential for avoiding any issues.
GDPR is one of the most far-reaching and complex; if your business collects or processes the personal data of European citizens, which basically means any business activity, your compliance is non-negotiable. This means transparent data collection practices, obtaining explicit consent from users, and having robust systems for protecting personal data – or risk severe fines and reputational damage.
These aren’t going away either – particularly when it comes to climate impacts such as emissions reporting and biodiversity impact, with many new laws set to impact any company doing business in, or with, the region.
2. Communications : Know your media, know your audience
Europe is not a homogenous market; most countries have a distinct and unique culture which impacts consumer behaviour -making market research an essential part of due diligence. For example, while Germany and France might be lucrative due to their large economies, smaller markets like the Netherlands or the Nordics might provide niche opportunities with less competition.
Tailoring your offerings to fit local tastes and expectations is key to winning over European consumers. This includes everything from translating dialects and slang, to adapting your messaging to resonate with specific sociocultural values.
This also must impact your PR and marketing. Local partners and spokespeople are essential to understanding the media landscape and the consumers it’s trying to influence, as every region will have differences to account for in your communications.
The first and most obvious is of course language; French media largely use their native compared to German journalists who often conduct interviews in English, for example. Likewise, new product announcements do much better in certain media landscapes than others – with French media rarely covering such news. Lastly, you may just need someone in the region as spokesperson and to attend important events and conferences, and conduct interviews.
3. Choose the right entrance strategy, especially for PR
The right entry strategy is critical. Companies can establish a direct presence by setting up a local office or subsidiary, or they can partner with local distributors, agents, or joint ventures. The best approach depends on the nature of your business, the resources you have available, and the level of control you wish to maintain over your operations. For example, e-commerce companies might be able to serve multiple markets through a centralised hub, while service-based businesses may need local teams to ensure customer engagement and satisfaction. As discussed above, if you’re aiming to do PR in the region, a local partner is highly recommended.