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International Market Selection Strategies for Software Companies – Legal Considerations <ul><li>Richard Austin </li></ul><...
ISSUES <ul><li>Canadian Legal Issues </li></ul><ul><li>Foreign Law Issues </li></ul><ul><li>III.  Commercial Issues </li><...
I. CANADIAN LEGAL ISSUES <ul><li>A. Corruption   </li></ul><ul><li>Corruption of Foreign Public Officials Act  (1998, c.34...
I.A Corruption cont’d <ul><li>Transparency International Corruption Index </li></ul><ul><li>http://www.transparency.org/po...
I.B Export <ul><li>  </li></ul><ul><li>Export and Import Permits Act  ( R.S., 1985, c. E-19 ) </li></ul><ul><li>Area Contr...
II. FOREIGN LAW ISSUES <ul><li>A. Establishing a Foreign Presence </li></ul><ul><li>Type of business organization, e.g.: <...
II.A Establishing a Foreign Presence cont’d <ul><li>Documentation and approvals: </li></ul><ul><ul><li>For the establishme...
II.B Import Restrictions <ul><li>Depends on categorization under country specific laws, e.g. </li></ul><ul><li>Prohibited ...
II.C Financial/Tax <ul><li>Foreign Exchange Restrictions </li></ul><ul><li>Taxes </li></ul><ul><li>Compare foreign tax rat...
II.D Employment Laws/Issues <ul><li>Impact of local labour laws and practices: </li></ul><ul><li>Salaries including minimu...
II. E Other <ul><li>Marking/certification requirements </li></ul><ul><li>Foreign privacy laws </li></ul>
III. COMMERCIAL ISSUES <ul><li>A. Intellectual Property Protection   </li></ul><ul><li>Extent of protection under local IP...
III.B Resolution of Disputes <ul><li>How to obtain an effective remedy? </li></ul><ul><li>Arbitration vs. Court </li></ul>...
<ul><li>Questions? </li></ul>
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International Market Selection Strategies for Softwarte Companies

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This presentation identifies macro legal issues to be considered by software companies in selecting an international distribution channel

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International Market Selection Strategies for Softwarte Companies

  1. 1. International Market Selection Strategies for Software Companies – Legal Considerations <ul><li>Richard Austin </li></ul><ul><li>Toronto Computer Lawyers’ Group </li></ul><ul><li>October 8, 2009 </li></ul>
  2. 2. ISSUES <ul><li>Canadian Legal Issues </li></ul><ul><li>Foreign Law Issues </li></ul><ul><li>III. Commercial Issues </li></ul>
  3. 3. I. CANADIAN LEGAL ISSUES <ul><li>A. Corruption </li></ul><ul><li>Corruption of Foreign Public Officials Act (1998, c.34) </li></ul><ul><li>  </li></ul><ul><li>Criminal Code ( R.S., 1985, c. C-46 ) </li></ul><ul><ul><li>ss. 119 - 124 </li></ul></ul><ul><ul><li>s. 426 </li></ul></ul><ul><li>  </li></ul><ul><li>(*) U.S. Foreign Corrupt Practices Act (for Canadian subsidiaries of U.S. Corporations) </li></ul><ul><li>  </li></ul>
  4. 4. I.A Corruption cont’d <ul><li>Transparency International Corruption Index </li></ul><ul><li>http://www.transparency.org/policy_research/surveys_indices/cpi </li></ul><ul><li>TI 2008 Corruptions Perceptions Index (CPI) </li></ul><ul><li>Rank Country </li></ul><ul><li>  1 Denmark </li></ul><ul><li>9 Canada </li></ul><ul><li>18 United States </li></ul><ul><li>82 China </li></ul><ul><li>85 India </li></ul><ul><li>147 Russia </li></ul><ul><li>176 Afghanistan </li></ul><ul><li>180 Somalia </li></ul>
  5. 5. I.B Export <ul><li>  </li></ul><ul><li>Export and Import Permits Act ( R.S., 1985, c. E-19 ) </li></ul><ul><li>Area Control List </li></ul><ul><li>Export Control List </li></ul><ul><ul><li>A Guide to Canada’s Export Controls - General Software Note </li></ul></ul><ul><ul><li>Software under Group 1 (Dual Use) Category 5 Part 2 Information Security </li></ul></ul><ul><ul><li>Item 5400 – United States Origin Goods and Technology </li></ul></ul><ul><li>  </li></ul><ul><li>United Nations Act ( R.S., 1985, c. U-2 ) </li></ul><ul><li>  </li></ul><ul><li>Special Economic Measures Act ( 1992, c. 17 ) </li></ul><ul><li>  </li></ul><ul><li>(*) Foreign Extraterritorial Measures Act ( R.S., 1985, c. F-29) </li></ul><ul><li>  </li></ul>
  6. 6. II. FOREIGN LAW ISSUES <ul><li>A. Establishing a Foreign Presence </li></ul><ul><li>Type of business organization, e.g.: </li></ul><ul><ul><li>Branch or Representative Office </li></ul></ul><ul><ul><li>Joint Venture (Equity JVs and Co-operative JVs) </li></ul></ul><ul><ul><li>Partnerships </li></ul></ul><ul><ul><li>Wholly-owned entity, e.g. Wholly Foreign-Owned Enterprise (WFOE) (China) </li></ul></ul><ul><li>Capitalization Requirements </li></ul><ul><ul><li>Amount </li></ul></ul><ul><ul><li>Timing </li></ul></ul><ul><ul><li>Form of contribution </li></ul></ul><ul><li>Permitted Activities </li></ul>
  7. 7. II.A Establishing a Foreign Presence cont’d <ul><li>Documentation and approvals: </li></ul><ul><ul><li>For the establishment of the foreign presence </li></ul></ul><ul><ul><li>For carrying on a business </li></ul></ul><ul><ul><li>For the specific business to be carried on </li></ul></ul><ul><li>Business Scope </li></ul><ul><ul><li>Activities outside the scope of the approved business scope </li></ul></ul><ul><li>Location of Registered Office / Places of Business </li></ul>
  8. 8. II.B Import Restrictions <ul><li>Depends on categorization under country specific laws, e.g. </li></ul><ul><li>Prohibited </li></ul><ul><li>Restricted </li></ul><ul><li>Freely-tradable </li></ul><ul><li>Approval and registration requirements </li></ul><ul><li>Connection to ability to remit foreign exchange settlements? </li></ul><ul><li>  </li></ul>
  9. 9. II.C Financial/Tax <ul><li>Foreign Exchange Restrictions </li></ul><ul><li>Taxes </li></ul><ul><li>Compare foreign tax rate on business earnings </li></ul><ul><li>Understand available incentives </li></ul><ul><li>Treaty network with Canada </li></ul><ul><ul><li>Most marketing arrangements involve payment of royalties </li></ul></ul>
  10. 10. II.D Employment Laws/Issues <ul><li>Impact of local labour laws and practices: </li></ul><ul><li>Salaries including minimum wage laws, salary inflation and COLA </li></ul><ul><li>Benefits (Unemployment insurance, health insurance and welfare benefits, pensions) </li></ul><ul><li>Probationary periods </li></ul><ul><li>Turnover/Attrition/Retention </li></ul><ul><li>Termination of Employment </li></ul><ul><li>Unions and work councils </li></ul><ul><li>Employment of Canadians (*) </li></ul><ul><li>  </li></ul><ul><li>(*) For expatriate employees, consider: (i) willingness/ability to go; (ii) immigration requirements; (iii) personal taxes; and (iv) costs. </li></ul>
  11. 11. II. E Other <ul><li>Marking/certification requirements </li></ul><ul><li>Foreign privacy laws </li></ul>
  12. 12. III. COMMERCIAL ISSUES <ul><li>A. Intellectual Property Protection </li></ul><ul><li>Extent of protection under local IP laws </li></ul><ul><li>Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) </li></ul><ul><li>Understand and use foreign IP regime ( Chint v. Schneider Electric ) </li></ul><ul><li>Implementation and Enforcement: </li></ul><ul><li>Ease and location of infringement </li></ul><ul><li>Effectiveness of Administrative, civil and criminal regimes </li></ul><ul><li>Priorities, ability and knowledge of police and judiciary </li></ul><ul><li>Public policies </li></ul><ul><li>Implement Intellectual Property Protection Regime </li></ul><ul><li>  </li></ul>
  13. 13. III.B Resolution of Disputes <ul><li>How to obtain an effective remedy? </li></ul><ul><li>Arbitration vs. Court </li></ul><ul><li>Governing Law/Attornment </li></ul><ul><li>Enforcement of Judgments </li></ul>
  14. 14. <ul><li>Questions? </li></ul>

This presentation identifies macro legal issues to be considered by software companies in selecting an international distribution channel

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