6 Things You Need To Know Before Starting Your Global Trade
Even though it looks like the big sharks dominate the international trade, small and medium size firms can have their own teeth! Why not create a niche market for your specific products and services globally? This article is for those who want take a step toward the global trade.
1. LEGAL CONCERNS IN GLOBAL SUCCESS
To be successful in global trade you need to understand the laws that govern as well as the local laws where you are trading. In trade, U.S businesses compete with an increasingly global economy where large corporations operate from many nations. Complex import export laws govern international business. For example, there may be 3 nations involved: a company may have a location overseas that manufactures an item, and another that assembles, but a third that ships the final products to yet another location. Are you seeing the problem? This is when you have an international trade lawyer on speed dial, because a number of International Trade Law issues can arise and you don’t want to figure it out alone!
2. INTERNATIONAL SHIPPING AND CUSTOMS
For most companies, involved in the export of goods, the choice of a shipping company is paramount. The specialization of the company, however, must be considered, especially when the products are time sensitive items. Although most goods now travel on containers that are uniform in size and shape, some goods, like produce, require special treatment. When products arrive at a foreign port of destination, they must clear customs and you want to make sure there are no delays. The shipping company will be important in this regard and even if they do not have someone specifically in customs - they help with the delegation of the task.
3. SHIPMENT OF RESTRICTED ITEMS
Some products are subject to export controls and are regulated by a whole set of Federal laws. The purpose of these laws, known as export controls, is to deny actual and potential enemies access to technologies, which are likely to increase their military threat. Among the relevant laws that you must be aware of are the Arms Export Control Act and the Export Administration Act, as amended and COCOM. Both have controls are vigorously enforced and involve severe penalties for infringement. Make sure you have visited them on line and know what not to export and where.
4. DOING BUSINESS WITH A FOREIGN COUNTRY
In many cases, when an American company exports their product to a foreign country import restrictions and high duty rates apply. This also happens where market penetration is difficult. As an alternative, the US company may consider working with a company in that country or even the government of the country to export to avoid these issues. A partnership with a local company or local government can take different forms like a joint venture or to become a subsidiary of the company in the target country. The company may also form a corporation.
In order to do business in a foreign country, besides forming alliances with foreign entities, the American company should also be familiar with the culture, laws and regulations of that country. Consider that there may be specific quality and safety requirements, origin of components for duty and tariffs purposes, copyright and patent rights, etc.
One more thing you might pay attention to is when a third country is involved in the transaction. For instance, when a semi finished product is shipped to one country for final assembly and then reshipped to another country for distribution and sale, you and your company are responsible to review the issues between each country. This takes a support system and knowledge in each country and each juncture.
5. IMPORTING AND TRADE BARRIERS
Importing is a great way to offer unique services or products to your market or create a new market. The U.S. has very few barriers to trade and is a very efficient place to conduct business in. It does however have strict laws and regulations in place regarding safety and quality controls that do not exist in other countries. Unique copyright trademark infringement and software distribution laws are good examples, as are the customs regulations. However don’t worry and Trust TEIL for guidance!
6. PLAN YOUR BUSINESS WITH LEGAL WISDOM
When making a decision to take a company global, it’s not the case of just doing a business plan, but it is extremely important to know the laws, regulations and culture, then put those consideration into your plan.
The Evans International Law Firms, TEIL Firms, LLC is the unique law firm that can help you plan your global business with business and legal wisdom. To make sure that your international business is more likely to succeed, reach us to discuss your global plan in order to avoid common issues in doing business globally.