From Our Members

What should be remembered when starting a business in Europe?

You should not be afraid to develop your business in new markets, and choose niches in which you are ready to take risks.

Russia’s war has forced Ukrainian companies to diversify their business and look for new markets abroad, and NovaPay is one of them. Someone has already gone through this path, someone is just starting. Since the beginning of the full-scale invasion, NovaPay has opened two new offices—in Moldova and Lithuania.  

But what is the difference between doing business in the north and the south of Europe? How do cultural characteristics affect? What should not be forgotten when building relations with regulators, partners, and contractors? Here are some recommendations for newcomers—and not only from Ukraine.  

Things will never be the same again 

So, get ready for the fact that it will not be like in your domestic country. It won’t be worse, it won’t be better, it will just be different, in all areas: renting premises, opening a bank account, registering a trademark, finding and selecting people for the team.

For example, in most European countries, a real estate lease agreement is signed not for a month or a year, but for three or five years. If some companies in Ukraine are ready to start cooperation without a contract and often even without a subscription, in Lithuania, you will need at least three months to sign an agreement. In Moldova, for example, you can make it in three days, but, again, without money, they are unlikely to start a conversation. 

Each market has a different legal framework. Therefore, strengthen the legal direction and keep in mind that ignorance of the laws does not exempt from responsibility, and lack of understanding of the specifics may create additional difficulties.

For example, opening a bank account in Lithuania is not possible in a remote format and may take several months, and any operation—from transferring money from a current account to a deposit account to joining a new specialist to a client bank—requires the CEO’s presence. 

It will be impossible for just a domestic team to build a business in a new market for you, even to involve local cooperation partners, therefore, to get a feel for the market and its intricacies, you definitely need local specialists in the team of different levels. And, of course, learn the local language if you want to work in the local market. International languages will not be enough.

Reputation is the main thing

A new business in a new country will “reset” all your achievements in other countries, even your reputation. And for Europe, it is the entrance ticket to the market. And, if you can find a solution in the Moldovan market without having a well-known name behind you, how about in the Baltics and other countries because it is here that “word of mouth” is the best tool?

Therefore, I advise you to look for business communities, including closed associations, where you will find someone you know, and you and your business will be recommended and supported. You can also find partners there for almost any task. Connections are the most important thing and it works anywhere. In addition, partnerships and collaborations with an already well-known local brand – public or private – will be useful.

And yes, you should be prepared for the fact that, given the short history on the market, you will have to spend more money or time – for example, pay an advance for a longer term when renting a room or wait in line to print merch.

We will have to look at the ‘client-counterparty’ coordinate system differently 

Previously, having just moved to Europe, many Ukrainian businessmen thought in the paradigm of “Let’s teach Europe to work like Ukraine”, referring to the slowness of colleagues, and the overhang of life in the work-life balance system. Although a different approach works in Europe, this is the norm of life and work for locals. 

In Ukraine, we are used to the fact that the client is above all else, and all contractors dream of getting large businesses into their portfolios. In Europe, everything is the opposite. It is hard to believe, but here businesses are competing for a reliable counteragent. Not because the client is not important to the contractor. And because little Lithuania has no problem finding a customer in the local market, the entire EU is open to it.

Of course, working in Europe, you can currently build work with counteragents from Ukraine. Sometimes it can be convenient, but at the same time, it lengthens the chain, which means it multiplies the risks. 

The mental characteristics and traditions of the country are the key point 

Each country has certain national features. Lithuanians have a cold, prudent mind and are quite closed in communication than Ukrainians. Moldovians are emotional and sometimes chaotic. And here we are talking not only about communication but also about conducting business.

In Baltic the countries, you should not be intrusive, remind more than once about yourself or your request, and not call and disturb during non-working hours. In Moldova, you should be careful with promises and be ready for an “explosive” mentality. 

In general, in Europe, they treat their own and foreign national symbols with great respect. And this is noticeable not only in private but also in business life. Therefore, a patriotic souvenir can become a worthy corporate gift. 

We didn’t have much time to analyse the market, to live in it, to understand all the nuances before going out there.

But we concluded that you should not be afraid to develop your business in new markets, and choose niches in which you are ready to take risks. And let our experience be useful and contribute to your non-domestic market prosperity. 

This content has been produced in collaboration with a partner organisation through our Global Visibility Programme. Our programme helps companies boost their digital presence and strengthen the thought leadership of their experts. Find out more here.