Is your business ready to start expanding overseas? As exciting as it may seem to be in the position to start doing business abroad, there are also many aspects to consider before taking the plunge.
From a business perspective, you will need to identify whether there is demand for your service or product abroad. From a legal perspective, you need to ensure you comply with all the different laws and regulations in another country.
MSC Notaries have put together a guide on the key considerations and legalities to consider when expanding overseas or starting a business abroad. It may seem like the boring side of expanding business abroad, but get it wrong, and you can end up putting yourself and your company at risk.
What do you need to expand or start an overseas business?
There are various aspects to expanding overseas or starting a business abroad that you will need to consider and prepare in advance to ensure you don’t end up jeopardising your business rather than growing it.
Follow the local laws and regulations
Ensuring that your company complies with all the laws and regulations in the country but also the local area that you plan to start a new business in is arguably the most important aspect of doing business abroad. International law encompasses a vast range and number of legalities you must abide by for trade, tax, currency conversions, banking, and forming contracts.
If you are not an expert, you will need to work with someone local or a specialist in international law for your chosen country, who can advise you on local laws and help you work out contracts with local partners and potential employees. They can help with documentation and ensure all the necessary paperwork is submitted when trading.
Not only that, but having an expert in international law at hand will ensure that you are kept up to date with any changes in laws and regulations in countries you are operating or trading in to ensure you can adapt and stay compliant long term.
Build relationships with locals
You will need to establish partnerships and relationships with those in the country you plan to expand into. Establishing relationships with local businesspeople won’t just help you with aspects like verbal or document translation but can also provide access to local opportunities and networks you otherwise wouldn’t have access to.
Every country has their own culture and way of acting and behaving in both daily lives and in business. Learning about the local culture and understanding cultural differences is important before diving into business in a new country. Fail to do so, and you can end up alienating local business people, potential partners and customers due to not making an effort to educate yourself and respect their culture.
Employ international financial advisors
As with the differences in laws and regulations in other countries, the same applies to finance. Other countries will require a different set of expertise on how to manage assets, where to invest your money, and more boring aspects like tax legislation. Rather than attempting to manage all the financial aspects of expanding your business overseas yourself and potentially making mistakes, it’s worthwhile seeking professional advice from those who are qualified and positioned to offer advice in the country you are expanding into.
Legal issues to consider for overseas businesses
Failing to abide by the laws and regulations in a certain country can lead to your business being fined large sums of money, or worse, being taken to court which involves hefty legal fees. Below are some of the key legal issues to consider for overseas business.
Tax regulations vary from country to country, and getting the amount of tax you pay wrong can result in hefty fines further down the line. Or, you can end up overpaying and reducing your profit margin. Working with a financial advisor or international accountant can help to ensure you are paying tax appropriately and not under or overpaying.
For B2C businesses, you will also need to work with a sales advisor to determine how much sales tax you will be required to pay and work out how much VAT to charge your potential customers accordingly.
If you are setting up a business abroad or opening a new location or office in another country, you will need employees to manage it for you, which opens you up to a whole new set of responsibilities and laws to abide by. Employees are protected by the laws of their country of residence so your business will need to be fully aware of how the laws differ across countries to ensure your employees have all the rights they need and are treated fairly and ethically.
For example, documentation like employment contracts and job offer letters must abide by the regulations of the employees’ country of residence and filing and payroll obligations must be in line with the specific country they are working in too.
Visas and work permits
If you plan to send employees from your current business premises to work in another country, you will need to prepare the relevant documents such as work visas and permits to ensure they don’t face issues when attempting to enter the country or start work.
MSC Notaries can provide notarisation, translation and legalisation services for visa and work permit applications to be successful. You can benefit from our guides to obtaining a work permit for various countries including China, South Korea, Thailand and Vietnam.
Contracts and terms of service
Both B2C and B2B businesses need to ensure their terms of service and contracts are translated by professionals and localised to avoid any mishaps or inaccuracies from occurring. Investing in professional translators and interpreters will ensure you avoid any loopholes, inconsistencies or incorrect information from being included in new business contracts.
MSC Notaries offer professional document translation services to provide notarised translations of key documents. We specialise in translating UK documents from English to Gujarati, Spanish or Portuguese and have access to a network of translators should you require translation services to other languages.
Data protection laws also differ across countries as to how businesses can receive, process, store and use personal data. You must ensure you meet the GDPR regulations of the country you will be expanding into or trading in. Failing to comply with GDPR laws can lead to large penalties and fines, so it’s important to prioritise making sure you are handling, using and storing consumer data in a secure and compliant manner.
When moving business abroad, you will likely need to set up physical premises in another country. Whether you choose to rent or buy a property abroad, there will be a whole new set of regulations, laws and processes in place to follow for property owners or tenants to abide by. These laws are in place to protect your rights and responsibilities so it’s important to educate yourself or work with a local property advisor to ensure you get a fair deal and don’t end up at risk.
By working with professional locals in the country you are expanding into and forming strong working relationships, you are sure to avoid coming into any legal disputes. However, whether you are facing a legal dispute or not, it’s important to understand the processes in a certain country should you be taken to court or penalised in the future to protect your business in the future.
Enquire about notarisation or translation services when doing business abroad
MSC Notaries have been helping businesses to expand or set up overseas for decades. We provide professional, high-quality yet affordable business notary, apostille, and translation services to businesses across the UK and even offer mobile services for those who are unable to visit us at our central London offices. You can browse our Google reviews for an accurate insight into the quality of our services.