International Business Law Issues
One of the major possibilities for every entrepreneur across the globe is an ability to run a business abroad. It could be both expansions of already existing business, or start up from the scratch, or a subsequent expansion of a global company. The reasons for expanding abroad are usually either seeing the more attractive business environment, or inability to run the business in the home country due to the unfriendly business environment. Either way, expanding globally possesses serious business risks, especially for those entrepreneurs that are not well-prepared for the possible issues. Alongside with establishing an effective supply chain, hiring accountable employees, and managing the business, entrepreneurs encounter an issue of managing local legislations and abiding the local laws.
Truly, each country has its own rules and legislations regarding business operations. This is, in fact, a matter of concern for both well-developed companies and mid-sized entrepreneurs since some of the law aspects can scupper an overseas venture. The key for neutralizing an issue is conducting a research of local regulations that might concern the business. Otherwise, business possesses a threat of not meeting the local standards, putting back the process and potentially wasting the resources.
Global companies sometimes display disobedience with local laws and regulations, followed by legislative consequences. So, the online platform for renting rooms and apartments Airbnb was recently fined for 30000 euros for disobedience with Spanish tourist laws. In addition, the platform is experiencing legislative issues across the globe, such as existing regulations for short-term apartment rents in New-York, and similar emerging legislations in Berlin (Coldwell, 2014). While well-established global companies have an opportunity to pay such amounts and redirect business strategy to comply with laws, such fine would surely cause an impact on entrepreneur’s budget. The situation, in fact, could get worse, causing entrepreneur or a company to abandon the business and thus wasting efforts and capital.
Moreover, entrepreneurs are not the only law subjects when conducting an oversea business. Intellectual property, that is well protected by the US laws, is vulnerable to violations even in well-developed economies, such as China, India or Russia. The above countries have poor records on protecting the intellectual property of foreign companies, thus imposing an additional risk for entrepreneurs. In some cases, local laws demand the entrepreneur to register intellectual property to a local partner in order to do business, thus increasing the risks of infringement of piracy (SPITZ, 2016).
Law obedience also includes compliance with native country laws. For instance, the US laws apply to international business operations whether an entrepreneur has established a business branch or subsidiary, or is using a distributor or even exporting. In this way, the US Department of Commerce is regulating exports. Practically, some of such regulations prohibit to export goods to several countries, such as North Korea, Syria, and Iran with several exceptions. Some of the goods that can be adapted to military use are also prohibited to export without a license from the US. What is more, the US companies …
