May, 2013

         A 2013 Cross-Border Legal Audit 
Audit Tips 5 - 8

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Practical Ways to Enhance Revenues and Limit Cross-Border Legal Risk - Part II 


A 2013 International Legal Risk
2013 may be an excellent time to take a fresh look at the international legal health of your company. 

Emerging growth markets are especially important in light of slower growth in the US and Europe. Build a better foundation for international sales and investments without distracting your internal team or running-up excessive legal bills. A supplement to our 2012 Tune-Up, Parts 1 - 4, here with a focus on foreign market entry.


5.  Are You Inadvertently Hiring International Employees "for Life" and are Independent Contractors Better? 


Most countries restrict the hiring and termination of employees to a greater extent than does the U.S. - is your business prepared to take on employment obligations in other countries? Even if the answer is "yes," are you prepared to handle required administrative filings and benefit contributions? What about a smart use of probation periods in countries such as Japan? Can independent contractors accomplish what is needed in the short-term while your foreign market assumptions are being tested? 


6.   Forming International Subsidiaries - Does This Make Sense and Does the Country's Standard Form of Corporate Entity Offer the Best Combination of Risk Protection and Tax Efficiency? 


Is there a form of local entity that can both limit liability and allow local profits and losses to flow-through to the home country parent to offset profits and losses there? Is a local entity justified in the first place and does a local corporate form really offer a better appearance of a local presence than would a local form of limited liability company? If a local subsidiary is not under consideration, should it be if local hiring and other local activities have already reached a threshold of significance that creates unanticipated liabilities and local tax liabilities?   


7.   US Regulation of Cross-Border Business Dealings - The Growing Compliance Risk in Foreign Corrupt Practices and Export Controls 


Are your sales teams truly aware that playing by local "gift-giving" rules can be putting the company at risk of fines and reputational damage?

Does your legal team appreciate that "do not bribe" provisions in contracts are of limited worth unless training and corporate policies are vigorously implemented?


Do your products and technologies fall within export control restrictions that require an export license? Though they may seem to be innocuous engineered components or even software encryption tools, the U.S. and its treaty partners may view a product or technology as having a "dual use" that could cause national security harm if exported to even friendly emerging markets such as China.   

8.  Are Emerging Markets Such as India and Indonesia Being Neglected Due to False Assumptions About Market Entry and "Doing Business" Restrictions There?  


Is China being over-weighted in your international expansion plans? Whatever your wish list of countries for expansion, are some being delayed or advanced to the top of the list based on incorrect assumptions about difficulty or degree of legal risk?



About InternationalCounsel

Though our services range from single transactions to global contracts solutions for companies big and small, we also offer senior management a sophisticated analysis of whether the company's legal risk approaches to foreign market entry and cross-border contracts adhere to the kinds of best practices followed by the Fortune 500. 


This cost-effective overview, typically for companies with US$20 to $500 million in revenues, highlights what needs to be done to avoid expensive mistakes during a period of cross-border growth. The company may then choose to implement recommendations through our team or through its own in-house and existing law firm relationships.  


InternationalCounsel offers our senior cross-border legal team to companies  expanding internationally. Each team member is a former in-house international legal counsel to a major companysuch as Motorola, Abbott Laboratories and Kmart Corporation

We assist companies with their foreign investment and cross-border transactions, including through acquisitions, foreign office establishment, manufacturing agreements, outsourcing deals, licenses and agency and distribution arrangements, and including the critical international tax dimensions of such projects. While our experience is world-wide, we have a particular competitive advantage for Asia, including India, China, Japan and Korea   





David Laverty

+1 312.575.0601
[email protected]