Taking your business international is an exciting milestone, but it’s also a legal minefield. From regulatory compliance to intellectual property protection, expanding abroad without a solid legal plan can lead to costly setbacks.
Whether you’re opening a satellite office, forming a foreign subsidiary, or entering into partnerships overseas, here are the key legal issues every business owner should consider before going global.
1. Entity Formation and Local Business Structures
Different countries have different legal requirements for foreign businesses. You may need to:
- Register a branch or subsidiary
- Partner with a local entity
- Comply with local licensing or investment rules
What to do:
Research the best legal structure for your business in the target country, and consult local counsel to ensure full compliance.
2. Tax Compliance and Treaty Considerations
Operating abroad often triggers:
- Double taxation (both in the U.S. and the foreign country)
- Value-added taxes (VAT)
- Transfer pricing issues
What to do:
Understand the tax obligations in both jurisdictions and review any applicable tax treaties. Structure your operations to minimize tax liabilities while remaining compliant.
3. Employment and Labor Laws
Hiring local employees comes with:
- Contract requirements
- Benefits obligations
- Termination rules
- Immigration and work permits
What to do:
Develop localized employment agreements and review applicable labor laws to avoid violations or disputes.
4. Intellectual Property Protection
Registering your trademarks, copyrights, and patents in the U.S. does not protect them internationally.
What to do:
Secure IP rights in each country where you plan to operate or sell, and consider using international agreements like the Madrid Protocol or the Hague System.
5. Contract Law and Dispute Resolution
Contract enforcement and legal systems vary widely across countries.
What to do:
Use clearly written contracts with:
- Governing law clauses
- Arbitration agreements
- Jurisdiction designations
This helps avoid legal confusion and reduces litigation risks.
6. Export Control and Trade Sanctions
Certain products, technologies, and services are subject to export restrictions or licensing requirements.
What to do:
Review U.S. export control laws (e.g., EAR, ITAR) and ensure you’re not violating international trade sanctions or embargoes.
Final Thoughts
International growth offers big rewards, but legal mistakes can be just as big. A proactive approach including early legal review can help you expand with confidence.
Thinking of going global? Contact our law firm to speak with an attorney experienced in international business law.
