Calculating the Cost of Global Expansion: A Comprehensive Guide

In today’s fast-paced global economy, senior financial leaders are expected to do more than just manage cash flow and balance sheets. They’re responsible for driving business growth, identifying operational efficiencies, and enabling expansion into new markets. For many organizations, this includes establishing a presence in international territories.

But expanding globally comes with its own set of complexities, especially for CFOs and financial directors. From legal compliance and local taxation to workforce management, financial decision-makers must balance risk with opportunity. In this guide, we’ll explore how finance professionals can evaluate the true cost of global expansion—and how M91 can support efficient, compliant, and cost-effective entry into new markets.

The Role of Financial Executives in Global Expansion

While sales and IT teams may quickly reach international prospects or development talent, establishing a physical or legal presence in another country requires significant effort. CFOs must lead the charge, ensuring that the right processes, budgets, and risk management strategies are in place before the organization enters new territory.

Drawing from common practices across companies of all sizes, this guide helps you understand the financial, legal, and administrative costs involved in global expansion.

Key Considerations for Cost Analysis

Time Investment

One of the most underestimated factors in global expansion is the amount of time required. Financial teams need to plan for:

• Researching the country-specific business setup processes
• Hiring legal, accounting, and tax experts
• Deploying capital in the new region
• Registering the entity and fulfilling local compliance requirements
• Finding local HR and IT partners to support operations

Core Cost Areas

Before expanding into a country, CFOs must account for the following ongoing and upfront cost categories:

• Entity setup and registration
• Legal representation and compliance
• HR and payroll infrastructure
• Banking and taxation protocols
• Employee benefits and statutory contributions

These are rarely one-time costs. Many of them will continue to impact your financial statements for as long as the entity exists—and in some cases, even after exiting the market.

Example: Setting Up in Australia

Let’s use Australia as an example to understand the cost structure of establishing and maintaining a foreign entity.

Initial Setup Costs

• Entity Registration with ASIC and ATO: Includes registration for Australian Business Number (ABN), Tax File Number (TFN), PAYG withholding, and potentially GST.
  Estimated cost: $4,000
• ASIC Fees: One-time company registration
  Estimated cost: $700
• Tax Compliance Review: Identifying obligations for PAYG withholding, superannuation, payroll tax, and workers’ compensation.
  Estimated cost: $5,000

Annual and Recurring Costs

• Payroll Setup: Onboarding employees onto a payroll system
  Estimated cost: $250 per employee
• Monthly Payroll Processing: Includes payslips, PAYG, and remittances
  Estimated cost: $1,600 per 10 employees
• Annual Payroll Tax Filing: Filing tax returns and reporting income
  Estimated cost: $250 per employee
• Activity Statements (IAS/BAS): Monthly and quarterly tax remittances
  Estimated cost: $300/month for IAS; $700/quarter for BAS
• Payroll Tax Registration and Filing: Varies by state based on employee earnings
  Estimated cost: $750 (registration); $325/month (filing)
• Fringe Benefits Tax Filing: Covers benefits like company cars and housing
  Estimated cost: $3,600 per year minimum
• Corporate Tax Filing: Includes International Dealings Schedule (IDS)
  Estimated cost: $11,000 per year

Additional Hidden Costs

CFOs should plan for potential costs such as:

• Annual audit fees
• Legal and compliance consultations
• HR and benefits advisory services
• Delays due to government processes
• Currency exchange risks and transfer pricing

Making the Decision to Expand

When evaluating the feasibility of expanding into new countries, CFOs need to weigh the tangible and intangible benefits against the recurring and nonrecurring costs.

Key questions to ask:

• Can revenues generated in the new country be repatriated easily?
• What geopolitical risks exist in the target market?
• How expensive will it be to exit the market if necessary?
• Will local labor laws increase the complexity of recruitment and compensation?
• Are there local representation requirements for company ownership?

By answering these questions, financial leaders can align expansion decisions with long-term strategy and risk appetite.

Why Consider M91 for Global Hiring

Setting up a legal entity might be right for some organizations—but for many, working with an Employer of Record (EOR) like M91 is a more agile and cost-effective solution.

Benefits of Using M91:

• Avoid Entity Setup Costs: Momentum91  acts as the legal employer, handling local compliance and labor regulations in India.
• Accelerate Hiring Timelines: Launch your team in India in days instead of months.
• Ensure Compliance: Momentum91  navigates India’s complex tax, HR, and labor laws for you.
• Control Costs: Avoid long-term financial commitments until the market proves viable.
• Focus on Growth: M91 manages employment, payroll, and compliance so your teams can focus on core business goals.

Conclusion

Global expansion can unlock new revenue streams, diversify risk, and enhance a company’s global presence. However, the associated costs and risks must be thoroughly understood and managed by the finance team.

Whether you’re exploring new markets or planning to scale operations abroad, it is essential to assess the full financial implications. While setting up a legal entity offers control, it comes with ongoing obligations and complexity.

Working with M91 offers a smarter alternative for many companies—allowing you to establish operations quickly, stay compliant, and keep costs manageable. M91 helps businesses simplify global hiring in India so they can focus on growth without the administrative burden.