Legal issues in international business: what to expect

Legal issues in international business are one of the operational barriers that companies looking to expand beyond their borders often come up against. 

Now is a particularly attractive time for international expansion, as all the statistics show. Leading exporting countries such as the United States, the Netherlands and China have seen their international business figures grow by more than 20% (23%, 26%, and 22% respectively, according to Trade Map). 

The advantages of international expansion are manifold: from improving revenue levels and opening up to new consumer profiles to strengthening a brand’s leadership and authority. 

Internationalization, however, also involves a number of challenges that companies must face. Knowing how to resolve the main legal issues in international business removes this constraint, opening the door to success at a global level made possible by the digitization of the economy. 

In this article, SeproTec summarizes the main legal issues facing an international business and how to solve them. 

The main legal issues in international business

Employment law 

Some of the legal issues that need to be resolved with respect to staffing include drawing up contracts, checking laws on wages and other working conditions for employees, and knowing the rights at the collective bargaining level for workers in each country. 

Intellectual property

This includes issues regarding the protection of the company’s intellectual property, such as the use of patents, protection of trademarks, domains, and copyrights.

Contracts

Beyond employee contracts, there is a whole series of regulations that companies expanding into a new market must be aware of to draw up valid and secure contracts for both parties. The company should ensure contracts are drafted correctly to provide assurance.

Business acquisitions

One of the commonest international business expansion strategies is the acquisition of another company. At the legal level, this is a complex process that must be accompanied by total transparency, eliminating, for example, the potential language and cultural barriers that often arise in businesses with global ambitions.

Taxes

Tax regulations also vary depending on the country a business is located in. If the company also has an international presence, specialized advice should be sought. 

Data protection

There are efforts underway to unify data protection regulations (as in the case of the European GDPR framework). The reality, however, is that knowing the national laws on data protection and complying with them is still one of the top legal issues in international business to be taken into account.

How businesses can adapt to legal issues in international business

There are two major situations regarding the legal issues in international business described in the paragraphs above: you should have specialized legal advice to ensure you’re complying with the law; and you should be able to communicate fluently and accurately when drafting any legal texts. 

In this regard, there are a number of specialized services that companies can make use of to safely resolve the legal issues they face in international business.

The case of intellectual property is particularly striking: patent and IP services for international companies can take care of the registration of patents and trademarks in new markets and manage the translation of patents correctly, ensuring that this issue does not become an obstacle to the company’s global expansion.

On the other hand, there are also the services of legal translation, which deal with the drafting of texts of a legal nature (such as contracts), guaranteeing knowledge of the legal aspects in the target country and ensuring the thoroughness that this type of translation requires.

In turn, this service is complemented by sworn translation, which goes one step further: it certifies that the translation of a text is perfectly equivalent (an essential service when you need to authenticate texts with official bodies in the host location). 

In this way, companies facing legal issues in international business have specialized partners to assist them with their global progress.