While international growth has never been more accessible for business models of all sizes, it’s important to have an understanding of the legal complexities of global expansion. No two countries have the same legal setup, and misjudging the legalities of expanding your market share can lead to a sudden halt of your operational flexibility. From taxes to employment laws, the legal challenges of establishing yourself as a global brand can take time to streamline. However, failing to address the legal side of things because you’re too focused on marketing or shipping costs will expose you to unnecessary risks. Here are some of the key legal factors to address as you grow your brand into an international concern.
Subsidiary Requirements
Not all brands that expand overseas are going to need to establish an overseas entity. However, don’t assume that just because you do not have a business presence located on the ground that you are not bound by the regulations and the laws of the country in which you are selling. Consumers have different levels of protection in different countries, and you will need to adhere to those protections if you’re selling in that country, whether you have a base there or not.
Employees and Payroll
For large scale growth, you will need to have representatives in the countries that you sell in. That means that you will need to develop an awareness of how to hire in those countries and the legal requirements of each. This can be made easier by making use of a Professional Employment Organization (PEO). They can take charge of your employment processes, with companies offering services for PEO in China such as INS Global, that can make it much easier and cost-effective to build the right teams in the countries you’re expanding into.
Your IP
If you hold any patents for your products then you need to be aware that you will not be automatically protected in countries other than the one where the patent was filed. Your trademarks, design rights, and patents will all need to be registered specifically in your new markets. For European trading, you can bundle this protection into one EU-wide policy that will protect your IPs, but you can also do this country by country. No matter whether you’re expanding to Europe, Asia, or Africa, make sure that your intellectual property is protected.
Taxes
The most inevitable legal issue is that of taxes. Of course, taxes differ everywhere you go and everywhere you trade. That can leave you exposed to potential risks if you get your tax setup wrong. If you are operating a business inside another country’s borders then you need to make sure that you get the right advice when it comes to tax structuring. Sales tax and VAT are just as important to get right as payroll and pension plans. If you aren’t paying the right tax amounts then you run the risk of getting a hefty bill when you least expect it, and that can cause damage to the ongoing growth of your brand.
It’s never been easier to go global. However, some costs are often overlooked, and that can mean less chance of international success. Before you launch your brand into a new market, always make sure that you have the legalities in place. Get your legal necessities set up as a priority, and your path to global success will be much more secure.
