Taking your business operations overseas requires a basic understanding of international labor law. Due to the many twists and turns in each country’s legal system, it's best to work with a partner you trust. They will help you fully grasp these important concepts. Preparing yourself with the general knowledge first will allow you to start thinking about your company’s global strategy.
What is International Labor Law?
Tucked away inside a country’s legal system is the area that protects employees, employers, trade unions, and governments that are operating within the workplace. This area of the law is known as international labor law. Each country has its own set of rules and regulations. But in general, all of these laws are in place to protect business-related operations.
Organizations including the International Labour Organization, the World Trade Organization, and the European Union assist countries with the creation of various laws. The organizations also help businesses stay on track and remain compliant by being a direct resource for education on the rules and regulations regarding labor laws in specific countries.
Know the barriers to international trade compliance
Although there is nothing simple about international trade, you should know that when you expand your business internationally, you are now operating under the laws of two countries. As a result, you need to balance the requirements set forth in each jurisdiction. International trade compliance comes into play when your company starts to import and export products from country to country. Research the regulations to ensure that you’re complying with taxes, fees, and barriers to entry for each country of operations.
One place to start your research is with the International Trade Commission.
Protect your Intellectual Property (IP)
Small to midsize firms often find it difficult to protect its intellectual property (IP) while performing business overseas. This is due to a lack of information that is readily available to foreign companies. What you need to know now is that your IP that is trademarked or registered in the US is not protected in any other country. If you have vital information that needs to be protected, this should be one of the first steps on your list when expanding internationally. Simple ways to protect your IP from international operations include:
- Working with an in-country attorney to legally protect your IP under your target country’s guidelines.
- Get an established language in place to protect IP when working with independent contractors. But be aware you may not have enforceability if something does happen.
- Register your IP in your target country.
How your business handles international taxes
Employment taxes are complex and one of the largest traps for international compliance. Do your research, once again, and determine if your target country has an established tax treaty with the US and what taxes you as the employer are responsible for withholding. If you fail to get this right, the consequences are painful. One way to avoid compliance issues is by using an global payroll service. This service will manage withholdings, that go beyond taxes, and include benefits and bonuses.
International labor laws about terminating your business
It’s something that we all want to avoid. But, if there comes a time when you need to close the shop doors there are strict laws that you need to consider. When terminating a business overseas, there are lengthy processes surrounding government approvals, tax payments, and employee rights. Before starting a new operation, build a plan to prepare for the worst.
International labor law is a lengthy topic filled with a number of complexities. If you’re just getting started or you are in the process of getting your global strategy in place, contact Velocity Global to speak with an expert on this topic. Our services get companies operational in their target country within a fraction of the time it takes to establish a subsidiary. Plus, we give you the tools to ensure your business is remaining compliant.
