Legal aspects to be considered entering new markets

Before starting business in a foreign country it is very important to get as much information as possible on its legislation.

The main aspects to get acquainted with are: Constitutional law, Contract discipline, Types of business legal entities, Brand protection.

Constitutional law

In some countries political power prevails over every kind of law including the constitution. This is typical of dictatorial regimes where a person or a party are above the law and where there is not a clear independence among the legislative, executive and judicial power.

Contracts

Many aspects must be considered before signing a contract:

– Language to be used. If , as it is customary, the contract is written in the languages of the two parties, a third language (usually English) must be used and indicated as the prevailing language in case of controversy

– Presence of a non-disclosure agreement to protect any type of confidential and proprietary information or trade secrets

– Competent forum vs Arbitration clause. The latter is to be preferred in those countries where the judicial system is not independent from the political power

– Contract enforceability

Brands

A brand needs a triple protection: one has to protect one’s logo, the product name in Latin alphabet and the name to be used in the foreign country. This last protection is especially needed in South East Asian Country where one must also make sure that the sound of the name does not mean something unpleasant in the foreign language.

Types of legal entities

Business legal entities can differ widely from country to country so it is very important to have a clear idea of the legislation in order to choose the one that better fits one’s strategies.

To know more on contracts, brands protection, patents and legal entities contact our colleague Antje Krueger