Over the past couple of years, there have been an increasing number of businesses leaping into international marketplaces. According to a DMCC report there, 42% of companies in the UK who have shown an interest in moving overseas and that figure is firmly established following the recent Brexit vote.
Obviously, British businesses aren’t the only ones who are looking to expand beyond their national boundaries. The US Chamber of Commerce reported that 80% of the world’s purchasing power and 95% of the global customer base is outside of the United States. So, profits are to be made in emerging markets where there is a growing middle class and consequently a demand for various goods and services.
Once a business has established that they want to settle a branch or operational business abroad what are the entailing legal requirements? Generally speaking, the requirements vary depending on where the company wants to expand into and their industry. Though there are a couple of laws which are considered standard across all countries which is something we’ll examine below.
Understand Cultural Differences
The US and the UK, for instance, have entirely different cultures compared to the Middle East. It is also a legal requirement in places like the Middle East that your business practices are in line with the local culture. For instance, fitness while being big in the UK may not be as successful in Saudi Arabia or Jordan because of the cultural difference. Though to make it a success, the fitness business will need to be remodeled based on cultural aspects like gender segregation.
Other aspects to consider will also be language. A US fitness business will want to ensure that all communication is in Arabic while doing business in the Middle East. Communicating in Arabic will require having a team of multi-lingual people working in both countries.
Understand the Political History and Climate
Businesses need to understand a country or region’s political climate. Things like taxation and asset seizure history are worth keeping in mind. Take for instance that in 2013, the EU was putting in billions to bail out banks in Cyprus. The government of Cyprus was going into personal bank accounts to remove 10% of the funds they had deposited and labeled it as a tax. Apparently, understanding the law and history of the country means that you will not one day wake up to find that your profits are taxed for no reason because the political climate suddenly changed.
Get Legal Advice
Hire a good lawyer before moving your business abroad. Get an expat lawyer from your country who is working in the country you are moving to. That way the lawyer will understand the culture and other aspects of the move which smoothens the process.
Get Local Guidance
A team of local translators can be a significant help not just to translate all your material into the native language but to give you cultural guidance. Also, having locals working for you helps to avoid potential unforeseen hurdles in the way of operating in the new country.