Globalizing your business is a big move and can be both exhilarating and terrifying at once. Different countries often have varying rules for setting up businesses, and it’s important to be prepared for what’s coming.
There are many nuances to consider when you’re expanding your business. Understanding the legal issues of creating new entities, hiring employees, paying taxes, and more will help you make the right decisions for your business.
A Florida business law attorney is a great resource to help you plan your expansion. If you’re ready for an international move, we can help!
Here are 7 issues to consider before a global expansion.
1. Labor and Employment Law
No matter where your business is located, you’ll need to hire employees from time to time. When you’re in a foreign country, you are subject to their labor and employment laws.
Typically, anyone who is under the direction and management of your business is considered an employee. You must consider that your employees are protected by their country’s employment laws, and those laws may be very different from what you’re familiar with.
You should provide employees with a local employment contract rather than a U.S. offer letter. An employment contract protects you and your employees and clarifies the terms of hiring and firing as well.
Understanding foreign labor and employment laws is complicated. Seek the advice of an international business attorney for guidance on these issues.
Some of the biggest complications of global expansion show up in the form of taxes. The tax laws can vary significantly, depending on where you choose to do business.
Before you make a move, you should carefully examine the country’s tax laws and whether they have a tax treaty with the U.S. It’s essential to understand the tax consequences of setting up business in a foreign country.
In many cases, tax implications can mean the difference between the success or failure of a business venture. To ensure you’re on the right track, enlist the help of an expert in international law and business law in FL.
3. Intellectual Property
Some of the most valuable assets of any company are its intellectual property (IP). It’s important to note that your IP protections in FL and the U.S. will not protect you abroad.
The costs of securing and protecting intellectual property can be complicated and expensive. You can mitigate the risks with carefully crafted employment agreements, licenses, and other contractual arrangements with IP protection in mind.
An international business law attorney can guide you in these matters and is your best resource for protecting your IP overseas.
4. Corporate Structure
Many business owners assume that an overseas business will not be bound by the laws of that country. This assumption is usually wrong.
If your business plans go beyond making sales in another country, you have to consider the proper in-country corporate structure for your business goals.
This may include establishing a branch, representative office, subsidiary, or working with an International Professional Employer Organization (PEO). Each option has its own capital requirements, tax issues, unique costs, and timeline depending on the country.
Failing to put the correct structure in place can lead to legal issues for your business. Seek the advice of an attorney who is an expert in Florida business laws as well as international law.
5. Investment and Capital
In some countries, you must invest a certain amount of capital to set up a business. To complete a setup, you may have to bring in a certain dollar amount before you can begin.
Some countries, like the U.K., do not have a capital investment requirement. Other countries like India require a minimum amount of capital investment in the country to complete incorporation. You cannot receive an incorporation certificate until you meet this requirement.
You should understand the rules for investment and capital wherever you plan to do business. Seek the advice of a Florida business law attorney and be sure you can commit to the terms before you make a move.
Discuss all the implications of a global expansion with an experienced international business law attorney. Make sure you’re starting your new venture on a strong financial and legal footing.
6. International Trade Compliance
When your business crosses borders, the national security and economic interests of two or more countries come into play. Depending on your business venture, you may have to navigate multiple import and export regulations.
Use discretion about which countries you choose to do business with. Some countries like North Korea and Iran are basically off-limits. Others, including the U.K., make doing business overseas more favorable.
Understand the expected business practices of any country you’re considering for your business venture. Consult an expert in international law and business law in Florida for sound advice on expanding your business abroad.
7. Terminating Your Business
You may not want to think about terminating a business before it even gets started, but it’s a critical conversation to have. This is a situation that can get complicated unless you prepare in advance.
It can be an expensive and lengthy process to wind up a business in some foreign countries. Termination may require government approval and involve significant tax consequences.
There are also creditors’ and employees’ rights to consider. For all of these reasons, you need an exit strategy for any international venture you’re considering.
Consult a Florida Business Law Attorney
Expanding your business into a foreign country can be an exciting and lucrative adventure. But there are always risks to consider. Failing to prepare for global expansion can turn your business dreams into a nightmare of legal issues and red tape.
Although you may not have to worry about all of these issues, it’s likely that some of them will apply to your international business activities. A Florida business law attorney can help you prepare as you plan for an overseas expansion.
We’re here to help protects your rights and the interests of your business. Let our board-certified international law attorneys do the heavy lifting for you.
Contact Boyer Law Firm today for a case evaluation.