{"id":205134,"date":"2021-06-16T19:29:24","date_gmt":"2021-06-16T06:29:24","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=205134"},"modified":"2024-05-21T15:05:36","modified_gmt":"2024-05-21T02:05:36","slug":"business-expansion-overseas","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/business-expansion-overseas\/","title":{"rendered":"Key Considerations for International Business Expansion"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">There are a vast number of things to consider when expanding your business overseas. During a business expansion overseas, financial and business considerations are front and centre. It is natural to focus on the impacts that expansion will have on your business and the bottom line. However, many legal issues will affect your expansion. These considerations will ultimately influence whether your expansion is successful. This article sets out key legal issues to consider when you are thinking about expanding.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Formulating a Global Business Plan<\/h2>\n\n\n\n<p>If your international plan is not accurate on paper, it will not be accurate when you execute it. Your business must establish a plan for an easy expansion into new markets. You must plan your needs, goals, and commitment to operating abroad. It is also essential that company employees understand and know what international goals they are working towards.&nbsp;<\/p>\n\n\n\n<p>Before finalising your international business plan, you should research the foreign market and rethink your advertising methods. For example, more developed countries like Switzerland may fit digital marketing methods, but underdeveloped countries such as Zimbabwe may need different advertising methods.&nbsp;<\/p>\n\n\n\n<p>Your company must plan distribution methods, pricing, and financing while considering the new market\u2019s cultural, social, and economic factors. You may need to consider current global issues as well, such as legal elections or pandemics, to ensure you have run an adequate risk assessment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Navigating Cultural Differences<\/h2>\n\n\n\n<p>It may go without saying, but when you enter a foreign market, it is best to consider how the local market\u2019s <a href=\"https:\/\/legalvision.co.nz\/startups\/cultural-regulatory-differences\/\">culture and etiquette may impact your business<\/a>. Accordingly, you should familiarise yourself with the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>language barriers \u2013 ensure that you can communicate with your customers and avoid misstatements or linguistic faux pas that may cause offence or confusion;<\/li>\n\n\n\n<li>purchasing power \u2013 some cultures have a higher purchasing power than others, and you will need to research this to set an appropriate price for your products; and<\/li>\n\n\n\n<li>consumption habits \u2013 as an example, certain food markets, such as in India, may predominantly favour vegetarian options over meat.<\/li>\n<\/ul>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 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Choosing the right strategy is essential to maximise business opportunities while minimising operational costs. Some options for a market entry strategy are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>exporting \u2013 your company can maintain production facilities in New Zealand and transfer products to sell in foreign countries;<\/li>\n\n\n\n<li>franchising \u2013 where you licence your brand to local operators who pay you to use it but otherwise run their own business;&nbsp;<\/li>\n\n\n\n<li>licensing \u2013 you may choose to transfer the right to use a product or service to a foreign firm;<\/li>\n\n\n\n<li><a href=\"https:\/\/legalvision.co.nz\/corporations\/joint-venture-new-zealand\/\">joint venture<\/a>&nbsp;\u2013 your business can share costs and risks with another firm based in your foreign target market through a contractual arrangement;<\/li>\n\n\n\n<li>partnerships \u2013 where you use a partnership structure; and<\/li>\n\n\n\n<li>acquisition \u2013 where you purchase the shares or assets of a local business.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Understanding the Foreign Labour Market<\/h2>\n\n\n\n<p>You should ensure you are sufficiently familiar with the rules governing the local labour market to minimise your liability. This means researching the laws as well as market features like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>skills;<\/li>\n\n\n\n<li>average salaries in the relevant labour markets;<\/li>\n\n\n\n<li>education levels; and<\/li>\n\n\n\n<li>employee lifestyles.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Your company must be flexible in its employee policies to fit the labour market and its cultural differences. You should try and distinguish your business from other employers so as to maximise your recruitment capabilities. Specifically, consider the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>developing policies and handbooks that comply with local requirements;<\/li>\n\n\n\n<li>offering competitive benefits and remuneration packages; and<\/li>\n\n\n\n<li>establishing efficient HR and systems to maximise employee engagement.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Intellectual Property Protections Overseas<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">When competing in a new market, you will want to ensure you can continue to protect your brand and other critical <a href=\"https:\/\/legalvision.co.nz\/intellectual-property\/5-ip-assets\/\">intellectual property<\/a> that you may have protected with: <\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">trade marks; <\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">copyrights; and <\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">patents.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">A business expansion overseas can be crippling if you find that your name or key imagery is already trade marked by another business, particularly if they are a competitor.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Luckily, there are things you can do to protect your intellectual property in the new market. Importantly, you should conduct due diligence in the countries you are looking to expand to. As a starting point, there is a lot of research you can do from your browser in New Zealand. For instance, you can search:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">company databases;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">trade mark databases;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">domain names, and;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">social media.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">By doing this, you can see if there are existing businesses that provide similar goods and services to yours. You can also see if these business\u2019 are legally protected.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">It is a good idea to talk to a specialist intellectual property lawyer during expansion. This can help you protect your brand in the new jurisdiction. A lawyer will be able to access more databases and sources than you will be able to. This professional assistance can give you more conclusive information on how to protect your business during expansion.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Employment Law for Overseas Employees<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">When you are employing staff in your new office or branch abroad, you should understand different <a href=\"https:\/\/legalvision.co.nz\/employment\/5-questions-to-ask-a-new-zealand-employment-lawyer\/\">employment laws<\/a>. Indeed, it would be best if you did not assume your templates from New Zealand will work overseas. In many circumstances, you may need to get new employment contracts and other documents from an employment lawyer based overseas.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Other relevant factors to a business expansion overseas may be a problem if you are not aware of them. For instance, how do restraints of trade work in the new country? Are there protections if the employee is creating intellectual property? While you can usually include these in an employment contract, standards and practices differ for these matters worldwide.<\/span><\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/09\/23172253\/how-to-hire-and-inspire-560x792-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">NZ How to Hire and Inspire<\/div>\n            <div class=\"body-text\">\n                <p>Hiring new employees for your NZ business can be complicated. Let us help you scale up and reach your next milestone faster with this free employer guide.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.nz\/nz-how-to-hire-and-inspire.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">Prepare for Legal and Tax Obligations<\/h2>\n\n\n\n<p>Ensure you familiarise yourself with the local regulatory regime and any tax obligations arising from operating in the target market. Before you launch your business in another local market, you should consider laws that govern business incorporation and structuring. For example, incorporating certain businesses in Brazil requires filing dozens of documents and undertaking more than a dozen official procedures.<\/p>\n\n\n\n<p>To minimise commercial risks, you should:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>create commercial agreements that comply with local laws;<\/li>\n\n\n\n<li>review industry-specific local regulations;<\/li>\n\n\n\n<li>obtain as soon as possible the relevant certifications and licenses;<\/li>\n\n\n\n<li>understand immigration, customs, and shipping regulations; and<\/li>\n\n\n\n<li>maintain company records and governance.<\/li>\n<\/ul>\n\n\n\n<p>To meet tax requirements, you will need to research the relevant policies. This is essential as different regimes use different taxation methods. For instance, some use GST, like New Zealand. However, others, like EU nations, use value-added tax (VAT).&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">It can be easy to focus on the business factors of a possible expansion, especially when you are calculating if it is viable or not. However, it is important to consider legal issues when planning. If you are not able to operate in the new country with your brand or the brands of key products and services, that can hinder your move altogether. You should also be aware of the legal dynamics in the new country and not assume that existing practices will always translate overseas. Getting local expert advice for employment law and checking your obligations as a foreign-owned business can help you avoid non-compliance. <\/span><\/p>\n\n\n\n<p>For assistance with your international business expansion,&nbsp;our experienced&nbsp;<a href=\"https:\/\/legalvision.co.nz\/startup-lawyers-lp\">startup lawyers<\/a> can assist as part of our LegalVision membership. You will have unlimited access to lawyers who can answer your questions and draft and review your documents for a low monthly fee. Call us today at <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or visit our&nbsp;<a href=\"https:\/\/legalvision.co.nz\/membership\/\">membership page<\/a>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1619751645517\"><strong class=\"schema-faq-question\"><strong>Do national intellectual property protections still work overseas?<\/strong><\/strong> <p class=\"schema-faq-answer\">No, not necessarily. In many cases, protections will only work in New Zealand. You will usually need to take out new protections and check what jurisdictions you can get new intellectual property protections in.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1619751661822\"><strong class=\"schema-faq-question\"><strong>What are the employment law considerations when expanding overseas?<\/strong><\/strong> <p class=\"schema-faq-answer\">There are a range of relevant employment law considerations, including the laws around what must be included in an employment agreement, minimum standards such as a minimum wage, and practices around restraints of trade and intellectual property. Laws on these change wildly from country to country.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1619751676300\"><strong class=\"schema-faq-question\"><strong>What are tax law considerations when expanding overseas?<\/strong><\/strong> <p class=\"schema-faq-answer\">Different countries can have hugely different frameworks for paying tax, and you may need to factor in additional obligations as a foreign-owned business. Getting expert advice from an accountant and tax lawyer will help you get this right.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"3bc3beddae\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/205134\" \/>            <input value=\"https:\/\/legalvision.co.nz\/business-structures\/business-expansion-overseas\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Key Considerations for International Business Expansion\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>There are a vast number of things to consider when expanding your business overseas. During a business expansion overseas, financial and business considerations are front and centre. It is natural to focus on the impacts that expansion will have on your business and the bottom line. However, many legal issues will affect your expansion. These<a href=\"https:\/\/legalvision.co.nz\/business-structures\/business-expansion-overseas\/\">Continue reading <span class=\"sr-only\">&#8220;Key Considerations for International Business Expansion&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13316,"featured_media":147,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1176,153,1559,219739,1205,1841","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[4],"tags":[93,174,292],"class_list":["post-205134","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-structures","tag-enterprise","tag-overseas-company","tag-franchisor"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Key Considersations: Overseas Business Expansion | LegalVision<\/title>\n<meta name=\"description\" content=\"Prior to a business expansion overseas, it is crucial you consider the legal obligations of your business in the new country. 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