Legal and Regulations

Navigating international business laws

Don’t let rules and regulations — at home or abroad — stall your international business efforts.

Published: October 09, 2019

International markets can offer great opportunities for any business. But in order to make the most of these opportunities, it’s essential to proactively manage the risk of international operations.

Understanding the laws and regulations associated with international business can go a long way toward mitigating your financial risks. To prepare or maintain your overseas venture, work with a business law attorney who specializes in the country or region you’re targeting, and familiarize yourself with the following types of regulations.

Ensure domestic compliance

When preparing your business to expand internationally, you should guarantee that you have any U.S.-based legal protections around trademarks and other types of intellectual property in place. Though intellectual property rights aren’t always valid beyond the region where they were granted, having solid legal footing at home is valuable for putting your business in an easier position to obtain the rights elsewhere.

Next, confirm that you understand the key directives and implications of U.S. export laws as they relate to your product or service and industry. You can explore these regulations in-depth at Export.gov.

Finally, familiarize yourself with the details of the Foreign Corrupt Practices Act, which regulates how businesses keep their accounting records, and prohibits payments to overseas officials or foreign government intermediaries intended to help you win or keep business.

Explore each region’s particular policies

If you sell goods or services on the ground in another country, it’s important to thoroughly investigate regulations, tariffs, and taxes your company may be subject to in all regions and levels of jurisdiction that touch your business. In the same way you manage the various levels of compliance at home, you’ll need to manage regulations in each international city, state or province, territory, and nation.

Additionally, as you source and hire international employees, familiarize yourself with workforce rules and regulations, which can vary significantly from nation to nation. For instance, you may be required to offer a certain amount of paid time off or maternity leave, limit the length of shifts, or provide advanced notice before termination.

International tax laws are another complex, but critical, matter. Variables that could impact your business tax obligations may include the location of your overseas base, the source of your goods and materials, and the route those goods and materials follow.

Get your business contracts in writing

Beyond the rules and regulations, clearly outline your company’s relationship with any overseas partners in a detailed contract. This document should include key elements such as:

  • The process for submitting payments: Research and establish which method is appropriate and permissible for your international trade situation. Options may include cash-in-advance payments, open account transactions, and documentary collection.
  • Termination language: Establish how your business handles payment for completed work.
  • Details on dispute settlements: If you plan to settle by arbitration, include the location and language to be used in the process; if you plan to settle by litigation, define the entity’s laws (country, state/province, or municipality) under which disputes will be settled.
  • Allowances for risks outside the control of either company: This may include situations like natural disasters, which frequently fall under a “force majeure” clause.

Separately, to manage its own regulations, the financial institution you partner with on foreign exchange needs will likely require additional information on your company.

If doing business in foreign regions makes sense for your overall strategy, ensure a smooth experience by preemptively understanding the range of laws and regulations you’ll face overseas.

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