Why global growth for ambitious SMEs depends on the right alliances

*This content was produced by the Financial Times in partnership with Citi Commercial Bank.

International expansion represents both promising opportunities and significant challenges. Approaching the complexities of new markets can be best tackled with local expertise and solid financial support.

Small to medium enterprises (SMEs) tend to reach a point when they need to break out of their domestic markets. A particular factor, or a combination of factors, drives the decision to expand overseas – such as improved profitability, new opportunities in developing economies, diversification or for a greater market share.

Amid a challenging economic environment and ongoing geopolitical uncertainties, businesses remain eager to explore international market expansion. To be successful in this, it is vital for them to conduct detailed research, put together a comprehensive strategy and work with knowledgeable local bankers that can assist with navigating legal frameworks, managing currency risks or rethinking supply chains. Every decision holds significance in a new market.

According to Citi Commercial Bank’s 2024 Industry Insights Report, which is based on a survey of 750 business leaders from around the globe, 55 per cent of respondents are actively considering expansion into Asian and European markets. The survey highlights that Asia is viewed as the most attractive region for growth with 32 per cent of responses, followed by Europe with 23 per cent. Yet over 40 per cent of those surveyed acknowledge the complexity of international expansion, with 38 per cent expressing concern around finding a more scalable way to enter new markets. The survey shows that many SMEs are eager to tap into the growth potential of new markets, and indicate that it’s useful to work with a bank that has a global presence and knowledge of local markets.

Citi has a global network covering more than 90 countries, and a history of helping businesses on their expansion journeys. A campaign with the FT, Breaking Borders, explains how it supports fast-growing companies, while its “The Makers of” video series sees business leaders share their experiences and lessons learned from expansion.

Go global, bank local

The Breaking Borders series suggests that local knowledge and experience, whether cultural or financial, is an important aspect of any successful expansion. Ignorance of local laws, regulations and banking rules can slow plans and prove costly. For instance, in Germany, it is a requirement to have a bank account in advance of incorporation to facilitate the necessary capital injection. Rules around taxation and financial responsibility vary widely around the world, and currency fluctuations and transactional complexities bring their own challenges.

As businesses expand across borders, effective cash management becomes critical to support growth, maintain liquidity and navigate complex financial landscapes. By leveraging Citi’s expertise in global cash management, businesses can gain the flexibility and resources needed to accelerate expansion, especially in fast-paced industries where speed and scale are key.

Watching “The Makers of” series of stories, a shared theme emerges. Successful international growth is not only about scaling a business – it is also about transforming challenges into opportunities for innovation and lasting impact. As these business leaders have shown, with careful planning, the right alliances and a willingness to adapt, companies can overcome the complexities of cross-border expansion.