I took away a few lessons in law that businesses looking to expand internationally must consider after recently visiting my law firm partner Sean Hayes in his adopted home of Seoul.
First, show some respect to your target market. Just like when you chose your domestic business target market, observing your desired international target market is right at the top of your list of things to do before expanding. But, there are extra added wrinkles.
Understand that, in some places, you will be considered “outside” the culture, and may face a cultural bias as an obstacle to penetrating your international target market. Places that have a long history and tradition that are different than western culture should be respected and understood, not discounted. So learn the culture. Visit often. Sample the cuisine. Go to festivals. And stay away from the tourist traps so you see the everyday life and routine of your desired international target market. This will inform you of not only your customer base, but also inform your marketing strategies and help you gauge your employment pool.
The best thing to do is, at the very least, to appoint a registered agent in your international target market. Retaining a registered agent in the country you plan to do business with, such as a local law firm, will be your official “contact point” for accepting legal documents, and will give you a local presence that may offset any institutional bias your business may experience. Retaining a local law firm can also help you navigate the applicable treaties and/or business regulations that would otherwise trip up your progress.
Second, consider currency exchange rates as you choose your international target market. This will allow you to maximize your potential for buying and selling inventory. This will also help you assess your risk factors is setting up shop overseas. Also, keep in mind that you may need to retain outside help, especially if collections will become an issue.
Third, just like in the U.S., consider the tax system. This is a no-brainer because, as you know already, the key to doing business anywhere is to maximize your revenue and bottom line.
Finally, always remember that foreign legal systems may not have the same legal values as the American legal system. Some may be impartial and consider protecting native customers and businesses a considerable factor to weigh. Some may be politically motivated when considering business or commercial disputes. Whatever the case may be, ask your lawyer for counsel about the integrity of the court system before opening up shop overseas.
Failing to do your international homework can be disastrous to your business. Selecting the wrong location will damage your revenue, operations, and bottom line.
by Gene Berardelli
- International Distribution Agreements: Selling your Products, Systems & Services Abroad via Distributors, Agents & Franchisees
- Challenges to Succeeding in Business in New York City
- Should I Purchase a Franchise Or Start My Own Business in New York: Six Factors For Your Consideration
- What Brexit Means For The New York Real Estate Market
- About Author
- About Us