How scaleups can tackle the barriers to international expansion

Expanding your business beyond its home market is exciting, but it also comes with a whole set of new challenges and risks.

Many companies assume that because they’ve succeeded at home, they’ll succeed anywhere. That’s rarely true.

Different markets have different customers, regulations, and competition. If you don’t get it right, expansion can drain resources and even sink the company.

The good news is, these challenges can be managed. With careful planning, your company can test new markets before committing, adapt to local needs, and expand in a way that’s sustainable.

This guide breaks down the biggest barriers to international expansion – market fit, regulation, finance, team, operations, brand, and strategy – so you can tackle them head-on.

1. Market fit isn’t universal

One of the biggest mistakes scaleups make when expanding internationally is assuming that success in one market guarantees success in another.

What works in Australia – our consumer habits, regulations, and even the way we do business – can be completely different elsewhere.

A great example comes from our Aussie fintechs. Many succeed domestically with open banking and real-time payments, but when they try to enter the US, they hit a wall.

US banking infrastructure is fragmented, and regulatory processes differ by state. Without adapting to local systems, these companies struggle to gain traction

A product might seem universal, but cultural, economic, and behavioural differences can create unexpected roadblocks.

Here are some of the key challenges you might encounter:

• Customer behaviour differences – A product solving a major problem in Australia may not be relevant elsewhere.
• Market timing – Some regions may not be ready for your product, while others already have strong competitors.
• Demand and pricing differences – Purchasing power and spending habits differ between countries. For example, premium pricing in Australia might be unaffordable in Southeast Asia.
• Language and communication – Marketing, product interfaces, and customer support need localisation, based on preferences, values and traditions, not just translation.

How to overcome market fit barriers

Many scaleups fail internationally because they don’t take the time to understand the nuances of their new market. Here are some strategies to better align your business with foreign audiences:

• Market research – Don’t assume demand exists. Conduct thorough research on customer needs, competitors, and cultural factors before committing resources.
• Test before scaling – Pilot launches in select regions can help assess traction before a full expansion.
• Partner with government, trade and local experts – Austrade, state trade agencies, and industry bodies can provide valuable insights and connections. Working with people who understand customer behaviour, regulations, and market trends can save costly mistakes.
• Adapt the product – Small changes, like offering different payment options, localised branding, or region-specific features,can make a big difference.

The startups that succeed are those that take the time to understand and respect each new market, building local trust, refining their strategy, and recognising that no two regions are the same.

2. Regulatory barriers are real

Expanding internationally means not only finding new customers, but navigating complex laws and regulations.

Every country has its own set of rules that impact everything from data security to employment. If you don’t comply, you could face heavy fines, legal battles, or even be blocked from operating altogether.

For scaleups, the challenge is that regulations aren’t uniform. What’s legal in Australia may be restricted elsewhere, and requirements can change suddenly. The more markets you enter, the more compliance headaches you’ll face.

Again, let’s look at our local fintechs trying to enter the UK and US. While Australia's regulatory framework (APRA, ASIC, and AUSTRAC) supports fintech innovation, the UK’s FCA and the US’s SEC have their own strict requirements.

Some Australian companies have had to significantly adjust their operations to meet local licensing and data compliance laws before they could expand.

Here are some challenges you’re likely to face as you expand:

• Data protection laws – Regulations like GDPR (Europe), CCPA (California), and PDPA (Singapore) have strict data privacy rules. What’s acceptable data handling in some parts of the world may violate laws elsewhere.
• Licensing and permits – Industries like fintech, healthtech, and logistics often require special approvals. For example, a healthtech startup handling patient data may need different compliance certifications across multiple markets.
• Tax and financial compliance – Countries have different corporate tax rates, VAT/GST structures, and financial reporting rules. Mismanaging this can lead to big financial penalties.
• Tariffs, trade barriers, and protectionism – Some countries impose import taxes or restrict foreign businesses in key industries to protect local companies.
• Trade tensions and political instability – Government policies can shift quickly, impacting market access. For example, the ongoing US-China trade tensions have led to sudden policy changes that have greatly affected international expansion in wine and agtech.
• Nationalisation risks – In extreme cases, governments have seized foreign-owned businesses, particularly in industries like energy and finance, leaving companies with no legal recourse.

How to overcome regulatory barriers

There’s a few strategies you can put in place to help mitigate these issues:

• Engage local legal experts – Hire legal and compliance specialists in each target market keeps you operating within local laws.
• Choose a low-risk entry strategy – Instead of setting up a full local entity immediately, consider working with local distributors, licensing agreements, or joint ventures to test the market first.
• Stay updated on regulatory and geopolitical changes – Markets evolve. Subscribing to trade updates, working with Austrade, and networking with local industry bodies can help you stay ahead of potential risks.

Regulatory challenges are unavoidable, but they’re manageable with the right strategy. Companies that take the time to understand legal frameworks, seek expert guidance, and expand carefully are more likely to succeed in international markets.

3. Financial planning is critical

Expanding overseas can expose your business to major financial risks.

Setting up in a new country requires investment in operations, marketing, legal compliance, and hiring. Without careful planning, your scaleup could burn through cash before seeing meaningful returns.

A common mistake scaleups make is assuming their financial model will work the same way in every market.

But currency fluctuations, foreign taxation, funding gaps, and higher operational costs can make expansion far more expensive than expected.

Without a clear financial strategy, international expansion can quickly become unsustainable. Here’s some barriers to consider as part of your financial planning:

• High upfront costs – Setting up overseas requires office space, local teams, regulatory approvals, and market entry campaigns. These costs add up fast.
• Foreign exchange risk – AUD to USD, GBP, or EUR fluctuations can erode profit margins and make pricing unpredictable.
• Unclear return on investment – Not all markets deliver the same revenue growth, making it harder to predict long-term success.
• Funding challenges – Australian startups often struggle to raise funding internationally because US and European venture capitalists tend to prefer investing in local companies.
• Market size vs. profitability – A large market like India or Indonesia may seem appealing, but lower purchasing power and infrastructure challenges can make it tough to turn a profit.

How to overcome financial barriers

Here are some strategies you can use to tackle financial challenges before or as they emerge:

• Start with a phased expansion – Avoid spreading resources too thin. Choose one market, test, and refine before scaling further.
• Use hedging strategies – Work with financial advisors to protect against currency fluctuations that could impact profitability.
• Optimise tax structures – Work with international accountants to structure operations in a way that minimises tax burdens while staying compliant.
• Focus on high-margin markets first – Enter markets with strong customer demand and higher profit potential, rather than just chasing size and revenue. If you’re not profitable, you’re not sustainable.
• Leverage local funding options – Instead of relying solely on investors, look into government grants and alternative funding sources in your target markets.

Financial planning can make or break an international expansion. If you can manage cash flow wisely and adapt your financial approach to each market, you increase your chance of success.

4. Local teams drive success

Many scaleups assume they can manage a new market from their home base. But often, your success in international markets depends on having the right people on the ground.

Hiring, managing, and integrating a cross-border workforce presents unique challenges. Time zones, cultural differences, and local business norms can create friction in decision-making, communication, and collaboration.

Without strong local leadership, even the best products and strategies can fail. Here’s the key team barriers you need to consider when planning your international expansion:

• Finding the right talent – You need local hires who understand customer behaviour, industry trends, and regulatory requirements while also fitting into your company culture.
• Managing a remote workforce – Operating across different time zones can cause delays, reduce collaboration, and make it harder to build a cohesive team.
• Cultural and communication barriers – Business norms vary widely. Some markets, like Japan and Germany, prioritise hierarchy and formal processes, while others, like the U.S. and Australia, value a more direct, informal approach.
• Employment laws – Many countries require businesses to establish a local entity before hiring employees, which can add legal and financial complexity.

How to overcome team barriers

A good culture supported by strong structure will do wonders to helping you overcome team barriers. Here are some other tactics worth tapping into:

• Hire local generalists first – Start with experienced professionals who can cover multiple roles while you refine your market strategy. As you grow, expand into specialist roles.
• Invest in strong leadership – Appointing a country manager or local lead gives you better alignment between your Australian headquarters and your new market.
• Use asynchronous communication tools – Platforms like Slack, Notion, Loom, and Asana help teams collaborate across time zones without disrupting workflows.
• Provide cross-cultural training – Educate your team on local business etiquette, work styles, and communication norms to everyone aligned on expectations across the company.
• Leverage an Employer of Record – If you need to hire before setting up a local entity, an EOR can handle legal compliance, payroll, and HR on your behalf.

To see this in action, Australian fintech startup Airwallex expanded into Asia, Europe, and North America by hiring experienced local teams while keeping its core leadership and product development in Australia. Combining local market expertise with a strong global company culture, they successfully navigated regulatory challenges and scaled internationally.

Expanding overseas means building strong, high-performing teams that bridge global and local operations. Scaleups that invest in local leadership, cultural alignment, and smart hiring are better poised for long-term success.

5. Operations must adapt

Expanding internationally means more than just selling the same product in a new country. From supply chain logistics to customer experience, every aspect of your business must align with local expectations.

If your operations aren’t set up correctly, even a world-class product can struggle. Delays in delivery, limited payment options, or an unfamiliar pricing model can create friction and reduce conversions.

Take Atlassian, one of Australia’s biggest tech success stories.

As the company expanded, it didn’t just rely on its core product appeal, it altered its pricing and support models to better suit different markets.nIn regions where businesses expect high-touch customer service, they expanded their enterprise support teams. In price-sensitive regions, they adjusted licensing costs to fit local budgets.

Here are some of the key operational challenges you are likely to face as you expand:

• Localising UX and payment methods – Customers in different regions may expect different languages, pricing structures, and payment options (e.g. buy-now-pay-later services are more popular in Australia than in some overseas markets).
• Supply chain complexities – Longer shipping times, tariffs, and compliance rules can increase costs and delay market entry. This is particularly challenging for hardware, e-commerce, or product-heavy startups.
• Warehousing and distribution – Holding stock in a new country adds overheads and may require partnerships with third-party logistics providers.
• Customer service expectations – Some markets expect 24/7 phone support, while others prefer live chat or self-service options. Language barriers can also impact satisfaction and churn rates.

How to overcome operational barriers

There are a number of strategies to help overcome these operational barriers. These include:

• Localise customer experience – Offer translated websites, region-specific payment options, and pricing tailored to the local economy.
• Work with local logistics partners – Partner with warehouses and fulfilment centres in key regions to reduce shipping times and costs.
• Optimise customer support for each market – Provide support through the channels your customers prefer, whether phone, email, or AI chatbots. If scaling a support team is expensive, explore automated translation tools to assist non-English-speaking customers.
• Test before scaling – Run pilot launches in select cities or regions before committing to a full rollout. This allows you to test logistics and marketing strategies with minimal risk.

For Australian scaleups, those that take the time to understand market-specific behaviours and operational challenges will scale faster and more sustainably.

6. Brand trust takes time

A strong brand in Australia doesn’t automatically mean recognition overseas. Even if your company dominates its home market, expanding internationally means rebuilding credibility from the ground up.

Customers in new markets often favour familiar local brands over foreign entrants, especially if they don’t understand your company’s history, reputation, or product benefits.

Simply translating your website and marketing materials, while a good start, won’t be enough. You’ll need to actively earn trust through local connections and a clear market fit.

Here are some of the branding, trust and reputation challenges you’ll run into when you start looking to expand your scaleup abroad:

• Overcoming local scepticism – Customers are often wary of foreign brands, particularly if they don’t have an established track record in the local market.
• Building credibility from scratch – Without brand awareness, customer acquisition is harder and more expensive. Convincing people to switch from an established local competitor takes time.
• Competing with strong local brands – Many markets have strong local players with deep customer loyalty. New entrants must offer a compelling reason to be chosen over familiar alternatives.

How to overcome brand and trust barriers

You need to think of brand as a way to reinforce trust – and to build trust, there’s a few tactics to help give you the edge.

• Leverage local partnerships – Align with trusted brands, government agencies, or well-known businesses. Partnerships with established local players give your scaleup instant credibility. For example, fintech startups entering Singapore often collaborate with local banks or regulatory bodies to gain trust.
• Use local influencers and business leaders – Thought leaders, industry associations, and regional business figures can introduce your brand to the right audience. Australian tech scaleups like Canva have successfully used regional ambassadors to localise their brand in new markets.
• Invest in PR and media – Getting featured in respected industry publications, attending key conferences, and forming relationships with journalists help raise your profile. In many markets, personal relationships with media outlets can determine how often your brand is covered.
• Adapt branding and messaging – Tailor your brand positioning to local business norms, cultural preferences, and regulatory expectations. For example, in the US, Australian brands often highlight ‘trusted and innovative,’ whereas in Asia, positioning around ‘partnership and reliability’ can be more effective.

A strong Australian brand is a great foundation, but international success comes from earning trust in each market. Scaleups that invest in credibility, partnerships, and localisation thrive in international markets.

7. Expansion must be sustainable

Expanding into international markets is exciting, but many Australian scaleups fail by moving too fast.

They stretch their teams too thin, misjudge the complexity of operating in new regions, and burn through capital before achieving profitability.

A structured, phased approach is essential for long-term success. Here are some challenges you should factor into your plans:

• Spreading resources too thin – Entering too many markets at once strains finances, leadership bandwidth, and operational capacity.
• Underestimating local complexity – Each country has unique regulations, customer behaviours, tax laws, and hiring practices. A copy-paste approach won’t work.
• Burning cash before seeing returns – Many scaleups invest heavily in international expansion without first validating demand, leading to financial stress.

How to overcome expansion strategy barriers

You need to be vigilant with your plans to expand. Too light, and you’ll lack the structure to guide you. Too heavy, you’ll miss the opportunities that come with learning a new market. Here’s what you should consider:

• Start with one or two key markets – Instead of launching globally, test a focused approach. Australian companies often look to New Zealand, Singapore, or the UK as logical first steps due to regulatory similarities and market receptiveness. For the USA, cities like Austin, Denver, and Atlanta offer lower costs than San Francisco or New York.
• Validate demand before investing heavily – Run pilot programs, form local partnerships, or test digital marketing strategies to gauge traction before committing significant resources.
• Monitor key performance indicators – Track local customer acquisition, retention, unit economics, and regulatory hurdles before scaling further.
• Know your capital requirements – International growth is expensive, with upfront costs for hiring, compliance, and marketing. Secure sufficient funding and maintain financial discipline.
• Have an exit plan – If a market isn’t delivering results despite strategic adjustments, be prepared to pivot or pull back before draining resources.

Many Australian scaleups target the US too early, underestimating its fragmented regulations, competitive landscape, and high customer acquisition costs.

Those that succeed usually first secure a strong product-market fit with established revenue streams before aggressively expanding.

Final thoughts

The best scaleups don’t assume they can copy-paste their success. They take the time to understand different markets, adapt to local customers, and build strong teams on the ground.

International expansion is a long game. It takes careful planning, smart financial decisions, and a willingness to tweak your strategy along the way.

The companies that succeed aren’t always the biggest or the fastest, they’re the ones that stay flexible, learn quickly, and focus on long-term growth.

With the right approach, expanding overseas can turn a thriving local business into a truly global success story.