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Legal Requirements of Starting an Overseas Business

Finding new markets and incorporating business in a foreign country is exciting yet full of challenges. You might have conducted a highly accurate market research for your product/service and the stats are very much convincing for setting up a proper business entity in the new country, but there are always some hidden challenges which can only be met by consulting local experts. One such challenge is the legality of the business.

The first and foremost aspect to consider while starting a company in a new country is to know and fulfill the legal requirements. The legal requirements are actually too complex and you must consult the local legal advisor who has experience of dealing with foreign company set up in the country.

Related Reading:

5 Things to Consider When Expanding Your Business Abroad

Since your overseas operation are determined by your business objectives, available resources and other tax and legal concerns, there’s no single form to satisfy all of your company’s needs. To make things simple, this article will list some of the major issues that may arise while incorporating a company abroad and how to deal the same.

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Trademark Protection:

The trademark laws and rights are generally based on actual use in a given country. You must know the fact that your registered domestic trademark does not automatically confer any trademark rights in other countries as it is not international copyright. The first step you should take is to ensure the availability and registration of your trademarks in all targeted markets. Since, it’s a lengthy and tiresome task, it requires to be done by a local expert!

trademark protection

Further, the trademark must be translated effectively in the targeted country and native language, i.e. if you intend to setup a company in Cyprus, well translated trademark in Greek and Turkish will let your business grow better!

You may be amazed to know that many growing businesses have had to modify their names, designs or slogans because of translation or pirating problems in new markets.

Company Structure:

Right after finding a suitable partner, distributor or franchisee you need to decide the corporate structure your company that you will use in the country or countries into which you’re expanding. This requires tons of paperwork for setting up contractual obligations.

company structure

While your lawyers are working on actual documents, you must have a careful eye on the structure of the relationship, the terms of the agreement and the scope and length of non-disclosure and non-compete clauses.

Labor Laws & Agreements:

Labor agreements should be reviewed for acceptability in both cultures. For instance, you are planning to expand your business to Europe and considering Ireland to be the gateway for your business in Europe, you cannot impose U.S. standards on local employees. This is why you must consult a local lawyer in Ireland to create acceptable documents!

labor law

Establishing Standards for Business Activities:

No matter in which country you’re planning to establish a company; let it be Thailand or Malaysia; the code of conduct is always based on the company’s values and objectives. For establishing a business overseas, it’s a must that all the local employees have in-depth knowledge of the code of conduct. This code can be communicated effectively by distributing in written to all company employees, agents, and business partners.

Employee handbook

It’s better to get quick pamphlets or employee handbooks printed in local language that provide more details and identifies instances when employees should seek further guidance from company lawyers, compliance officials or supervisory personnel.

Compliance Programs:

Every country has different laws to regulate the international business activities. You should put an updated compliance program in place right from the time when your company plans to do business overseas. This compliance program is a must to address the legal issues that arise from such activities.

For instance, imports and exports are subject to customs laws and regulations and the government might have imposed export and import controls as sanctions against certain countries.  In that case, your business must comply with the government policies!

compliance program

In a scenario where your business is not in compliance with the government policies, there are adverse consequences, including bad brand image, revocation or suspension of trade licenses and possible detention!

Successfully Immigrating as Foreign Investor:

In case, if you plan to migrate to another country as an investor, for instance, immigrating to UK as a foreign investor can be highly lucrative opportunity. Starting a business there can be very fruitful, but you cannot do it at your own, i.e. it requires a series of documentation and other procedures, which must be done correctly, otherwise your application will be rejected straight away.

investor immigration

This is why you must consult a local immigration lawyers to help you obtain the necessary visa, residence permit and the trade licenses!

Well, the above discussed are some of most common legal aspects of doing business abroad and there may be more depending upon nature of your business, objectives, countries in which you want to establish the business and laws and regulations specific to your product/service.

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