Doing business internationally? Here are some tips international business lawyers want you to know before doing business abroad. Legal issues to be aware when you growth internationally.
International Business describes all commercial transactions that occur between two or more businesses that operate in different countries. If this sounds like a rather broad, general description, you’re right, it is. This general definition includes investments, sales, both private company and government transactions, and commercial transportation actions.
Companies expand globally for a variety of reasons: new markets, lower production costs, less competition and to exploit economies of scale, to name a few. Any company looking to go international needs to do its due diligence first, however, including defining objectives, conducting market research and assessing whether it has the necessary resources. Legal issues are an important part of this advance work.
So, what do you need to consider before you go global?
The first thing you will have to do when expanding your business to another country is to register the appropriate business structure. This can be a branch or a subsidiary of your own company, or a new entity, the choice is all yours. Whatever you decide you must consider the relevant company laws.
Not all countries have a business-friendly legal climate. Request the advice of local consultants to have adequate knowledge of the appropriate procedures, bureaucracy and amount of time you will need before being able to start operations.
Intellectual property (IP) is a valuable asset for many companies. Laws and courts in the United States, the EU, and a number of other jurisdictions provide strong protection for patents, trademarks, copyrights and other IP rights. Some countries, however, such as China, India and Russia, have extremely spotty records when it comes to protecting the intellectual property of foreign companies against infringers.
When deciding whether to expand your business to a different country by investing there, it is worth having a look if there are any investment agreements in place between your home country and country in which you intend to invest. There are numerous bilateral (between two states) and multilateral (between more than two states) agreements which goal is to promote foreign investment and afford substantial protection to investors.
Making use of such treaties is really beneficial, as they impose a number of obligations to the receiving state as to the level of legal protection they should afford to foreign investors.
Short term flexible office space is widely available overseas but advice should be taken when taking larger space – whether office or manufacturing real estate. Obligations on tenants are not the same globally so it is important to understand what your rights and responsibilities are whilst occupying the space and after you move out.
While these legal considerations may sound intimidating, they are just part of the overall due diligence any company needs to work through in taking its business overseas.