Expanding into foreign markets: Key barriers and how to break through

Expanding into international markets can open the door to new customers and faster growth, but the process is rarely simple.

Small businesses often face several barriers to international business, from customs rules and local regulations to cultural differences and higher costs. These challenges can slow down progress and make it harder to enter and compete in a new market.

If you're expanding a small business into international markets for the first time, it helps to understand the main obstacles before you begin.

Whether you plan to sell online to overseas customers or build a local presence in a foreign market, you'll encounter new systems, new expectations and more paperwork.

In this blog for International Trade Week, we outline the most common entry barriers in international business and share practical steps to overcome them.

The aim is to help you avoid delays, reduce risk and grow with confidence as you move into foreign markets.

The main barriers to selling overseas

Small businesses face a mix of legal, cultural and practical challenges when going into foreign markets. Below are the most common barriers to international business that can delay or disrupt your plans.

1. Customs rules

Customs rules are one of the biggest challenges you'll face in entering global markets. Each country has its own requirements for importing goods, and even a small mistake can hold up a shipment.

If the paperwork is incomplete or incorrect, your products can be delayed at the border, returned or even destroyed. This can damage your reputation, frustrate your customers and increase your costs.

How to overcome this barrier

Use a simple process for every shipment:

1. Research customs rules for your target country: Check restricted goods, required documentation and import licences.

2. Prepare the right paperwork: Typical documents include the commercial invoice, packing list and export declaration.

3. Label and classify products correctly: Use the correct HS code and product description to avoid inspections and delays.

4. Work with the right partners: A trusted freight forwarder or customs broker can handle paperwork, track shipments and explain local rules in plain terms.

5. Keep records for every shipment: Store copies of all documents so you can prove you're following all the relevant rules if questions arise later.

Taking these steps will help you move goods across borders more smoothly and avoid unexpected costs or delays.

2. Registration and compliance

When expanding into foreign markets, many small businesses struggle with registration and compliance.

Each country has its own licences, trading rules and business laws, which can be hard to understand if you're new to international trade. The process can take longer than expected, involve extra paperwork and add unexpected costs.

If you don't meet local rules, authorities can block your products or stop you trading. This is one of the most common barriers to international business, especially for smaller firms with limited time, money and legal support.

How to overcome this barrier

Plan early and follow a clear checklist:

1. Confirm what licences or approvals you need: Check if your product requires safety certificates, registrations or local testing before it can be sold.

2. Learn the basic business rules in your target market: Focus on product standards, labelling laws and rules that affect your industry.

3. Get local legal help: Hire a lawyer or adviser who understands that country's system and can review documents before you sign anything.

4. Create a realistic timeline and budget: Build in extra time for delays and set aside money for legal fees, translations and certifications.

5. Keep all paperwork organised: Store digital copies of licences, certificates and approvals so you can share them quickly if someone asks for them.

Following this process will help you stay compliant from the start and avoid costly setbacks when entering a new market.

Download our free exporting guides

USA / China / India / Singapore / UAE / Germany / France / Australia

3. Taxes and tariffs

Taxes and tariffs are another major barrier to international business. Each country has its own tax rules and import fees, which can affect your prices, profit margins and cash flow.

When you're expanding into foreign markets for the first time, this can feel complicated and time-consuming. Getting it wrong can also lead to penalties or delays.

You may need to deal with VAT or GST, local sales taxes, duty rates and extra handling fees. These costs vary by country, so a product that's profitable in one market might be expensive to sell in another.

How to overcome this barrier

Use a simple plan to stay in control of your pricing and tax obligations:

1. Check VAT, GST and duty rates for your target market: Use official government websites or trusted trade tools to find the current rates.

2. Decide who pays import duties: Make it clear in your terms whether you or the customer will pay taxes on arrival.

3. Work with a local accountant or tax adviser: They can explain local tax rules and help you avoid fines or double taxation.

4. Adjust your pricing before you launch: Calculate landed cost (product + shipping + duties + taxes) so you know your true profit.

5. Review tax rules once or twice a year: Rates can change, especially during economic or political shifts.

By planning ahead, you can price your products correctly and avoid costly surprises when you move into a new market.

4. Language barriers

Language is one of the most common challenges companies face in entering global markets. If you can't communicate clearly in the local language, simple tasks become difficult.

This can slow down sales, cause misunderstandings and weaken relationships with customers, suppliers and partners.

Language barriers can also affect recruitment, customer service and marketing. If buyers can't understand your product information, they're less likely to trust your brand or complete a purchase.

How to overcome this barrier

Focus on clear communication from day one:

1. Use local translators for key content: Translate your website, product descriptions, packaging and customer emails so nothing important is misunderstood.

2. Work with native-speaking partners: Local consultants, agents or distributors can help you avoid mistakes and build trust more quickly.

3. Hire or train at least one language contact inside your business: Even one multilingual team member can make communication smoother and reduce delays.

4. Keep your messaging simple: Avoid idioms, jokes or complex phrases that don't translate well.

5. Invest in cultural awareness, not just translation: Words matter, but tone, politeness and expectations differ too.

A clear communication plan helps your brand feel local, even if your team is based overseas.

VIDEO: International trade: Importing and exporting basics

Watch this webinar to learn more about the new customs rules and the main things to know when importing or exporting:

5. Cultural differences

Cultural differences are one of the biggest barriers of international marketing. Customer habits, buying behaviour and expectations vary from country to country.

A message or product that works well in the UK might fall flat or even offend people in another market. If you don't understand local culture, your marketing can miss the mark and your brand may appear out of touch.

Small details matter. This includes imagery, colours, product names, service style and even how direct your communication should be. These differences can affect sales, erode customer trust and harm long-term growth.

How to overcome this barrier

Take time to understand your audience before you launch:

1. Research how customers in that market like to buy: Look at payment habits, shopping channels and the level of service customers expect.

2. Test your marketing with local people: Use focus groups, surveys or local agencies to check you have the right messaging, visuals and product name.

3. Adapt your approach instead of copying your UK strategy: Adjust your tone, colours and campaigns so they fit the local culture.

4. Learn local etiquette and business norms: Expectations around meetings, negotiation and communication style can vary widely.

5. Review and improve after your first launch: Gather feedback and refine your approach before scaling up.

A culturally sensitive marketing strategy helps your brand connect with customers faster and avoid costly mistakes.

6. Supply chain issues

Managing a supply chain across borders can be challenging for small businesses. Longer routes, extra paperwork and different shipping providers increase the risk of delays and higher costs.

Even one disruption can slow deliveries, damage customer relationships and reduce profit. This is a common barrier when expanding into international markets, especially when resources are limited.

Many factors can affect global supply chains, including:

• customs checks

• congestion at ports

• transport strikes

• political events

If you don't have back-up options, a small problem can quickly escalate.

How to overcome this barrier

Use a simple plan to build a reliable supply chain:

1. Choose experienced logistics partners: Work with providers who understand your target market and can handle customs, routing and tracking.

2. Keep a small buffer of stock: Hold extra inventory for your best-selling items so short delays don't stop you from fulfilling orders.

3. Have a back-up supplier or transport route: Even one alternative option can protect your business during a disruption.

4. Track shipments in real time: Use any tools your courier or freight forwarder make available, so you can react quickly if something goes wrong.

5. Review suppliers' performance regularly: Check delivery times, costs and reliability at least twice a year.

Planning ahead will help you stay in control of your supply chain and deliver a consistent service to overseas customers.

7. Staffing issues

Hiring and managing staff in a new country can be difficult. Language barriers, different working styles and unfamiliar employment laws can slow your progress.

Small businesses often find it harder to recruit locally because they lack contacts and brand recognition. This can affect productivity, customer service and team morale.

Local talent is valuable when expanding into international markets, but building the right team takes time and planning.

How to overcome this barrier

Focus on building a small but capable local team:

1. Start with roles that need local knowledge: Prioritise sales, marketing or customer support before hiring for back-office roles.

2. Work with local recruiters or partners: They understand the labour market and can help you find people faster.

3. Create clear onboarding and communication routines: Use regular check-ins and shared tools so everyone understands goals and expectations.

4. Invest in cultural awareness training: This helps both UK and local staff work together without misunderstandings.

5. Consider flexible options at the start: Contractors, freelancers or agencies can be a good first step before building a full team.

A thoughtful approach to hiring will help you build trust, avoid confusion and create a stronger foundation for growth in your new market.

8. Currency and payment

Selling in a new market often means dealing with different currencies and payment expectations. Exchange rates can rise or fall without warning, which makes it harder to plan your pricing and protect your profit.

On top of this, customers in some countries prefer local payment methods rather than international cards, bank transfers or PayPal. If you don't offer familiar options, people may abandon their purchase.

For many small businesses, this becomes a real barrier, as currency shifts and limited payment options can get in the way of sales and create financial risk.

How to overcome this barrier

Keep control of your payments and pricing with a few simple steps:

1. Offer local payment options: Research the most common payment methods in your target country and add them where possible.

2. Use multi-currency tools or accounts: This can help you collect payments in local currency and reduce conversion costs.

3. Check exchange rates regularly: Monitor currency trends and review your prices if rates move too far.

4. Agree payment terms in writing: Make sure both sides are clear on currency, timing and fees before you supply goods or services.

5. Consider FX services for regular transfers: Some banks and providers let you lock in rates to avoid surprises.

A simple plan like this helps you stay competitive on price and avoid unnecessary losses.

9. Data, legal and digital compliance

When expanding into international markets, it isn't just trade rules you need to understand. Many countries have strict laws on data, privacy, product information and online marketing.

If you collect customer data, run digital ads or sell through an online store, you may need to meet local standards as well as GDPR. Fail to comply and you could be fined or face restrictions on your trade.

This barrier is growing as more buyers shop online and expect clear information, secure payments and transparency.

How to overcome this barrier

Protect your business by building compliance into your digital plan:

1. Check local data and privacy rules: Make sure your website, cookies and customer database meet local requirements.

2. Follow local labelling and product rules: Some markets require specific warnings, translations or information on packaging.

3. Be clear and open about how you use data: Update your privacy policy so customers know how you're storing and protecting their information.

4. Keep marketing claims accurate: Advertising rules vary, so avoid making promises you can't prove.

5. Review your e-commerce set-up: Make sure your platform can support local languages, currencies and legal notices.

Good compliance builds trust and makes it easier to grow your brand in new markets.

Conclusion

Expanding into international markets can be a major opportunity for growth, but it also brings new challenges.

You must deal with customs rules, compliance, taxes, cultural differences and supply chain risks before you can trade with confidence.

On top of that, modern barriers like data laws, currency changes and local payment habits can make global expansion more complex than it first appears.

The good news is that you can manage these barriers with the right preparation. Taking time to research your market, work with trusted local partners and plan for delays will make each step smoother. A clear strategy helps you stay compliant, protect your margins and build stronger relationships with overseas customers.

With the right approach, entering a new market becomes less of a risk and more of a chance to grow your brand, increase sales and reach customers you could never reach at home.

People also read

• Managing language barriers and cultural differences when selling overseas

• How to find overseas buyers and sell to them

• Building your brand internationally

Trade internationally without the usual friction

Ready to grow your business beyond borders? Get the tools, insights and expert support you need to simplify cross-border payments, save money and scale with confidence. Join the programme today