Top 10 International Business Considerations for Public and Private Companies for Public and Private Companies
Choice of LawWhen your company enters into a contract with a foreign party, pay attention to the choice of law provision.
Choosing the law of your State as thegoverning law gives you a number of advantages…. For example, you can assess risks easily because you and your attorney are familiar with the local law. Alternatively, you can choose governing international law, such as the United Nations Convention on Contracts for the International Sale of Goods (CISG), the
Regional Restrictions Traditionally, business relationships with certaincountries, such as Cuba and North Korea, have been highly regulated by the United States Government. If your company is going to do business with certain regions, be sure to note if the Secretary of State orother government bodies have limited U.S. interaction.
Hire a Local Attorney An attorney can save you time and money byhelping you conduct business effectively and help avoid disputes in the future. An attorney will also help you partner with local counsel in the target country where you seek to conduct business.
Foreign Corrupt Practices Act (FCPA)FCPA (Foreign Corrupt Practices Act) is an area where a high volume of litigation arises! Be aware of thelegislation and make sure your company has balanced internal stated policies with regard to the FCPA.
The anti-briberyprovisions of the FCPA make it unlawful for aUnited States person to make a payment to aforeign official (either agovernment controlled company or agovernment employee) for the purpose of obtaining or retaining business.
International Licensing as an Alternative One traditional way to expand into a foreign market is to set up a branch or subsidiary.
As an alternative, a company can considerlicensing the right to run a local company. The local company is more familiar with the market and may already have a management structure and clientele that canbenefit from the items you want to sell.
Duties If a company is considering exporting or importing a productout of or into the United States, the duty rate can have a significant impact on the profit.Besides duty rates, you also need to take into account antidumping and countervailing duties.
Antidumping duties will be imposed on an importer when the goods are sellingat a price that is below the price at which the same product is sold in theimporters home market.Countervailing duties will be imposed on an importer when the importers homecountry subsidizes the goods and thereby facilitates their sale at an unfairlylower price.
Consumer Protection Law In the United States, § 5 of the Federal TradeCommission Act and the Fair Packaging and Labeling Act require that every product produced abroad andthen imported into the United States be conspicuouslymarked with the English name of the country of origin.
15 U.S.C.A. § § 45 and 1453. Many other countries have similar laws to protect their consumers. Pay attention to and comply with suchrequirements when a company looks to sell goods in a foreign country.
Incoterms Incoterms or International Commercial terms are aseries of pre-defined commercial terms published by the International Chamber of Commerce (ICC) that are widely used in International commercial transactions.
Before a company enters into an international salecontract, be aware of the meanings of the Incoterms in the contract which create obligations, costs, and risks associated with theselected Incoterms.
Documentary of Sale Ensure you have the proper documents as part of your documentary of sale. These include, yet are not limited to, a letter ofcredit, a bill of lading, and a sales agreement.
International Arbitration as Dispute ResolutionCompared to litigation, international arbitration canhave a simplified process and can save a company time while providing a legally enforceable judgment.
Moreover, because the atmosphere can potentially be less adversarial than litigation, international arbitrationcan resolve disputes with minimum harm on the business relationship between a company and its partner.