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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 three legal issues to consider when you are thinking about expanding. They include:

  1. protecting your intellectual property;
  2. understanding employment law in the relevant country; and 
  3. what the new tax laws mean for your business, as well as other obligations.  

Intellectual Property Protections Overseas

When competing in a new market, you will want to ensure you can continue to protect your brand and other critical intellectual property that you may have protected with:

  • trade marks;
  • copyrights; and
  • patents.

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.

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: 

  • company databases;
  • trade mark databases;
  • domain names, and;
  • social media. 

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’ are legally protected. 

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. 

Employment Law for Overseas Employees

When you are employing staff in your new office or branch abroad, you should understand different employment laws. 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. 

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.

Other Obligations When Operating as a Foreign-Owned Business

Of course, the country you are expanding into may have a different taxation structure than what you are used to in New Zealand. There may be extra costs and obligations associated with operating the business, particularly as a foreign-owned entity. You will need to get expert advice to ensure you are complying with all of these obligations. 

Other countries are not necessarily as lenient as New Zealand regarding being open for business and investment from non-New Zealand based businesses. Because of this, it is important to ensure you are checking what the obligations will be and factor in the costs associated with compliance. 

Key Takeaways

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. If you want to know more about expanding your business overseas, contact LegalVision’s business lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

Do national intellectual property protections still work overseas?

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. 

What are the employment law considerations when expanding overseas?

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. 

What are tax law considerations when expanding overseas?

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.

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