For an entrepreneur who is used to expanding their business in a nimble way, expanding abroad can be a real eye-opener. The reason for this is that laws can be very different abroad to how they are here in the US: you may need to apply for a permit when using a certain piece of equipment or operating in a certain sector, for example, while you’ll also need to take into account employment laws of the country in question. This article will delve into some of these issues, and offer some advice on how to ensure you stay on the right side of the law.
Licenses and permits
The first thing to remember is that not all countries are as supportive of free markets as the US is – and you could end up finding yourself having to apply for a permit or a license in order to operate in your chosen foreign market of choice, even if that seems unnecessary to you, and even if you wouldn’t have to do that in the US. This could work in your favor to some degree: something that is regulated in the US might be unregulated in another country. But for American entrepreneurs, it seems to mostly be the other way around. Chinese medical device registration is one example of where rules in possible expansion destinations can differ, while certain financial instruments can be another area of contention. Getting some expert advice, then, is essential.
Employment law
When it comes to employment law, no country is perfect. Every nation on earth has some rules that are fair to both employers and employees, and some that might be perceived as unfair. But this moral and ethical dilemma can morph into a legal predicament, too, especially if you’re an entrepreneur looking to expand your business abroad. Many countries around the world have stricter labor laws than in the US. In many European countries, for example, there is an upper limit on the number of hours employees can spend working – although some European nations also have opt-out clauses from this, so there can be extensive regional differences.
Finding some expert legal help to assist you in navigating these choppy waters is a good idea – and doing it early before any problems arise is also wise. It’s essential to be sure that you’re on the right side of the law in whichever destination you choose, primarily because your efforts at international expansion would fall at the first hurdle if you were to be taken to court there for flouting labor laws. But it’s also important to be aware of the law when making your commercial decisions: if you’re running a manufacturing business with a very limited staff budget, for example, heading to a nation where wages are typically high would not be the most prudent of ideas.
Terms and conditions
The “terms and conditions” page that can now be seen on most major websites is a key part of the laws around terms of sale in most advanced countries. It’s essential for a new copy of these terms and conditions to be drawn up and provided to customers in the new locality in order to stay on the right side of the law there.
But when expanding abroad, it’s not enough to simply put your list of terms in American English into Google Translate and then hope for the best: instead, it will need to go through a process known as “localization”, which is both linguistic and legal in nature. First off, you’ll need to ensure that the terms are actually legal in the country you’ve chosen to expand to: you may not be quite as obliged to offer certain rights to consumers or clients as you would be in the US, for example, or you may be even more obliged, with further responsibilities than you have in the US. You’ll also need to make sure that the list is entirely accurate in the foreign language, and professionally translated.
Expanding abroad, then, can bring with it all sorts of headaches. But perhaps the main challenges that an entrepreneur who is considering a shift abroad will have to contend with are the legal and regulatory issues surrounding foreign expansion. From ensuring that you take into account the way in which license requirements might be different in a foreign country, to the importance of labor laws, it’s important to be proactive and to avoid falling into a web of legal problems.
