South Eastern Europe Desk

For German MSMEs looking to expand their business abroad, countries in South Eastern and Eastern Europe (SEE/EE) have become some of the most favourable destinations in recent years. SEE is a thriving region with diverse market opportunities across various industries, holding significant growth potential for companies operating in sectors such as manufacturing, food processing, renewable energy, or information technology, among others.

The countries in the region offer various opportunities suitable to a broad range of business needs. This is why it is essential to conduct thorough research, compare the markets and learn as much as possible regarding the advantages, potential and challenges each location brings before deciding which one is right for your business.

For example, Bulgaria and Kosovo, with its skilled and tech-savvy workforce, are particularly suitable for IT-nearshoring. North Macedonia has established itself as an excellent location for automotive suppliers, whereas Serbia and Romania offer great potential when it comes to industrial activities thanks to its well-developed infrastructure.

To find out more about the differences between SEE/EE countries as well as their advantages, MSMEs can consult organisations specialised in facilitating the expansion of business activities into South Eastern and Eastern Europe, such as the German Chamber of Commerce (AHK), German Trade and Invest, or other specialised location scouts. Furthermore, ProCredit Bank is committed to helping companies set up their business in South Eastern and Eastern Europe.

For an SME with plans to expand its operations into South Eastern and Eastern Europe, the journey starts with finding the ideal market within the region for them, followed by opening a local company and actually starting a business there.

Once these steps are completed, and the business operations are under way, the next challenge that becomes obvious is managing the local subsidiary in a foreign country. A successful approach to this challenge involves consideration for several key aspects, such as legal and regulatory compliance, operational activities, as well as specific political and cultural considerations.

From a legal and regulatory perspective, you need to be able to navigate the local laws specific to the country you’ve chosen as your next expansion destination, which includes labor laws, taxation, data protection, and intellectual property, among others.

When it comes to the everyday operation activities, you have to think about areas like financial management, including controls and reporting, as well as specific accounting standards that might be different from those in Germany. Having a well-prepared and efficient treasury department is also essential.

Another important aspect of managing a local subsidiary is the supply chain, which includes suppliers and providers of logistics services. Finally, marketing and sales will also be crucial to a successful cross-border business operation, and that requires an adapted strategy for promotion that would take into consideration the local culture and local consumer behavior.
With all these challenges and potential hurdles in mind, companies looking to expand their business in South Eastern and Eastern Europe could use some help and support so that they can manage their local subsidiaries successfully.

ProCredit Bank has the means to do exactly that. Our relationship managers can support you from Germany and connect you to our teams on site, and through our local ProCredit banks, we can connect your local accounts to your main treasury management system and assist you with any aspect of your day-to-day operations in the region.