So is starting a business abroad less costly than at home? The answer, of course, depends. It depends on what type of business you're considering, and where you want to start it. The following broad guidelines will give you a rough idea of some of the comparative costs involved.

While prices in most parts of Europe and Japan are just as or more expensive than in North America, most of the rest of the world is less expensive to do business in. In many developing countries, these items from your income statement and balance sheets will represent significant savings for you over a similar situation in America:

• Labor, especially unskilled. One of the major reasons why so many multinational companies have factories in less developed nations like Indonesia, China and India. Wages in some countries are still just cents a day.
• Rent. With some exceptions, in general local-style office space and production facilities will be cheaper on a comparable basis.
• Basic materials. Important if you're thinking of manufacturing or importing basics.
• Transport. If you're on a well established route, transport costs can be less expensive.
• Daily living and personal expenses. A consideration during the early days when you're in the "struggling entrepreneur" phase! But even though the overall cost of living in a country may be a lot lower than in the States, and even though you might be saving in some areas, watch out for these possible hidden costs:
• Transport: If you're on a less well-established route, this can add significantly to your costs. You'll also be paying more in insurance and aggravation: Breakdowns, thefts and weather making roads or waterways impassable are all more common in developing countries.
• Qualified labor: While hiring unskilled labor is definitely cheaper, if you want to hire a senior, qualified foreigner, you might have to put up the full "expat package." Do you want to hire a qualified local? Yes, you and every other foreign-owned company in the country. In some countries, there is an extreme imbalance between the demand for professional local skills and the supply, driving up labor costs for qualified locals.
• Bureaucratic costs in time and headaches: While time might not show up as a line on your Income Statement, you need to factor in the fact that probably nothing will happen as fast as you originally forecast.
• Need for a local partner: For certain industries in some countries, having a local partner is more than just good business sense: It's a legal necessity. In this case, you might have to do a joint venture with a "sleeping" local partner that doesn't do anything but lend his name to your registration. The legal costs associated with setting this up then need to be considered.
• Corruption and bribery: In many countries, a standard of doing business, and one you should try to estimate beforehand. Talk to other foreign businesses. In what cases have they had to "smooth things over?" And how much did it cost?
• Taxes: Higher in some countries than in the United States.
• Rent: If you need a prominent, central address for your office location, rents for prime office space in major urban cities, even in ones with relatively cheap overall living standards like Mexico City or Shanghai, can be even more than in downtown Manhattan.

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