Every business can encounter legal issues when trading abroad. As in all cases of business woes, preparation could save you hefty fines. This article explores how to protect your business from these legal issues while you expand.
Trading in a foreign country is a challenge within itself. If your whole business ups and moves to that country, it can be even harder. No matter where you operate or what you do, you must remember one thing. That protecting your business is the priority. This means through cybersecurity measures, through plain old locks on the doors, and through taking out the right insurance policies to make sure you are always covered.
The Global Economy Requires Secure Legal Protection
As more and more businesses stretch out into the global marketplace, the international landscape of legality has had to grow to match customer needs. Every time a new business crosses from national to international, there opens a whole new set of business risks, corporate taxes, and local regulations. What is legal for a business in the US might not be legal for a business in Britain. These new challenges can have a significant impact on a business’s finances, funding sources, and even on its reputation.
There may be differences in the regulations between countries or there may be differences in consumer needs. One only must recall the time IKEA moved to America where products are larger in size. The company found their glasses were too small and that consumers were buying vases as cups. This type of international mishap can be expected when companies move from one country to another even if it cannot be prepared for.
One thing that you can prepare for during the shift is the differences in legal risk. Ensuring your business has an excellent foreign liability insurance policy makes a good starting point. This protects you from the cross-country legal risks you may encounter even before you know you are making mistakes. It is one thing to be prepared to make mistakes and quite another to know what those mistakes might be.
Legal Issues Abroad – Getting it Right
You can use the following guidance to ensure you protect yourself and your business from mistakes made in regulatory compliance from one country to the next.
Research the Legal Landscape
While investing in a savvy foreign liability insurance policy is the professional way to cover your ventures abroad, protecting yourself from compliance breaches does not stop there. Learning local regulations regarding your area of business might take time, but it will be well worth it if you do not earn any fines.
Examine Licensing, Permits, and Other Legalities
Anything that may disrupt your business trading abroad must be dealt with first. This means checking if you need certificates, licenses to trade, business permits, or any other legal documentation which secures your right to work abroad. Do you have a working visa? Do you meet the monetary requirements countries like the UK have on new businesses opening in their country. Follow these rules or risk the consequences.
Learn the Unofficial Business Rules
Every country in the world has different traditions regarding doing business. For example, in Japanese business etiquette you must address the person by their surname and add ‘San’ to the end. In India, you might be greeted by either a handshake or a Namaste gesture. Either is acceptable.
Learn the Language (or Employ Someone Who Knows It!)
Learning the language so that you can trade is all part of the process. Although Business English may be the international standard, you cannot expect every employee or collaborator to speak it. Instead, take lessons in the business speak of the new language. Ask specifically for a business language tutor. They have expertise in the specific buzzwords likely used in your new region.
Learning the language makes it more likely that you can spot a dodgy deal. It helps you stay legally compliant with local laws since you can do your own research. All in all, it is just good for business.
Familiarize Yourself with the Supply Chain
When you move to a foreign country there is a high chance that the supply chain will work differently. A great example of this is in European countries like Italy and Spain. During the afternoon they have a siesta time for a few hours. This slows the working day down considerably if you are used to the 9-5 grind.
Instead, familiarize yourself with how invoicing, procurement, and supply chains work in your new country. There may be legalities surrounding how you order, receive, or handle goods.
Briefly touched upon above, procurement is another area which could get you into hot water when trading abroad. Foreign property and land for sale comes with foreign rules on how to govern it. Buying and selling might not work the same way as it does at home. In some countries, you might need the permits in place before you buy. In others, you must ensure the health & safety of the workers who refurbish your place, while in others this responsibility might fall on the contractor.
Don’t get caught out. Check the laws before you begin any lengthy buying processes.
Establish a Legal Contact in Your New Country
Your business probably pays a retainer to a US lawyer, and you do not want to stop doing that. Any trade you do abroad might still link back to your taxes in the US and there may be other reasons you still need that kind of legal protection. However, finding a new legal contact within your new country makes sense. They are specialists in the local laws you know nothing about. Get your liability insurance at home and consult this new legal expert for all things regarding your current country.
Staying Compliant is Key
Above all, you must stay within the compliance with regulations expected from your business in your new country. Stay in touch with legal experts and ensure you are fully insured for the work that you do. Learn that language, too. It will help you more than anything else.