Solving Legal Issues In International Business Expansion


There will come a moment when the most logical step for your business is going to be to take a step across national borders and expand into new countries and their markets. It is definitely a very exciting moment, but you must also be aware of a variety of legal issues that come with the package. When you open shop in a whole new country, you must get to know every important detail about regional laws. At this point, it would be wise to consult someone with solid legal knowledge and have an idea what to expect.

In this article, we are going to cover some of the legal issues that you are most likely going to encounter, and how you can solve them.

Foreign laws

So, as we have ascertained, once you decide to establish a branch of your company beyond your own borders, you are going to have to face foreign laws and policies, and see how they affect your business plans. A lot of companies think that foreign laws don’t apply to them, but they are most commonly wrong, particularly if you are selling a product or a service.

You must think about the fact that there are consumer laws and employment regulations that you now have to comply with. When you start to sell your product and allow people to purchase from your website, there are going to be obligations, paperwork, and tax to deal with.

Investment treaties

Once you determine that it is time to expand your business overseas, it would be a smart idea to do some research and find whether there are investment agreements between your own country and the one that you intend to branch into. It is actually quite common for there to be bilateral, or even multilateral agreements which focus on promoting foreign investment. Furthermore, they can provide protection to you which you will find extremely beneficial.

Treaties like this dictate a variety of obligations to the receiving country, especially in terms of legal protection that a foreign investor is entitled to.

Corruption issues

You have to be well aware that corruption is a big problem in a huge number of countries all around the globe. So, when you happen to do business internationally, you will become aware that every country has its own rules and practices when it comes to how it works. What you will notice is that a lot of countries ask for particular compensation so that your business can be established on their grounds.

where you need to be very careful. Such compensations may be seen as corrupt in a number of other countries, and as a result, you may face the consequences. For example, if you are under the authority of the US Foreign Corrupt Practices Act, there is a high probability that you might get prosecuted for such a compensation, even though it was presented to you as something completely regular in the country that you decided to expand to.

Employment laws

When you expand your business into a new country, you are obviously going to hire people from that particular region. This is why you need to be well informed about the local employment laws, as they defer from area to area, and local authorities are most commonly the ones that have the jurisdiction over them. So, keep in mind that you must comply with various legal obligations, such as those related to health, safety, wage, and the like. If you violate any of the local employment laws, the local authorities have the right to penalize you for it, or even decide to close your business in their region.

Furthermore, once you hire a foreign employee, it might happen that they move to your company’s main HQ at some point. So, let’s say that you are centered in Australia, and you are bringing in a European worker. There are going to be certain documents that you are going to have to provide for them to work for your company without any constraints. When it comes to a skilled work visa in Australia they have plenty of professionals who can help you deal with this issue, and make sure that your employee has all the rights and benefits of a local.

Tax codes

Just thinking about taxes makes you want to bang your head against a wall, even when it comes to merely your main company HQ. But when it comes to taxes and fees related to doing business internationally, it can be a problem for a great number of companies, particularly small business owners. It can be quite a challenge, but if you don’t rush, and approach the whole thing with realistically and practically, it doesn’t really have to be such a huge issue.

Basically, it is crucial that you do your research and learn about everything that needs to be done. In other words, the majority of tax obligations surmount to ticking the proper box. So, before you start to expand your business into a particular region, make sure you know which box is the right one.

Expanding your business internationally comes with a variety of legal issues that you need to keep in mind and take care of. It is very important that you get to know all you can about foreign laws when it comes to trade, employees, taxes, and so on. You must also be careful of corruption issues that are common for a large number of countries in the world because you don’t want to suffer the consequences of breaking the law of the country under whose authority you are.

Solving Legal Issues In International Business Expansion

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