Legal issues to consider when starting a business abroad

In the context of economic integration, many individuals and organizations want to go to other countries to start a business. According to ICOS, an overseas business establishment service provider, there are many opportunities to own a business and maintain operations abroad, but there are also many potential legal risks if the business does not. Know the laws and regulations of the host country.

Here are the legal issues that businesses established abroad need to be aware of to avoid penalties and hinder business operations:

Establishment procedure

The process of setting up a business in each country is different depending on the specific provisions of the legal requirements of each country, each with its regulations.

The company registers its business form and business model according to the laws of the host country and must take full responsibility for its activities.

A company’s operational requirements, such as data protection, employee rights, or taxes, can become significant issues if a country’s laws are not followed correctly.

Businesses established abroad need to learn and understand the laws of the host country to avoid legal trouble. Source: Internet

Protecting the rights of workers

The company registers its business form and business model according to the laws of the host country and must take full responsibility for its activities.

A company’s operational requirements, such as data protection, labor rights, or taxes, can become serious problems if the laws of the country are not followed correctly.


Not only labor contracts, but other types of contracts such as B2C, B2B, or agreements with foreign suppliers must use the local language and ensure the legal validity of the country in which the company operates.

Therefore, companies must have independent legal authority to check whether different types of contracts or terms of service are legally enforceable.

Another challenge is that the language in all types of contracts must be in the local language. This requires companies to know and understand the local language or have a standard translation unit for legal languages.

Intellectual Property

Developed countries attach great importance to intellectual property issues. Trademarks, patents, design rights, designs, and copyrights must be registered in the market in which the business operates.

Enterprises should consider registering their intellectual property rights (if necessary) in all export markets.

For example, if you plan to sell in 3 or more markets in Europe, you should consider applying for EU-wide protection, but you can also apply for individual countries if you focus on doing business. business in limited markets.


Establishing a legal entity abroad requires the business to know the various tax codes and understand the business regulations of that country.

For example, in some countries, businesses that open offices for more than 6 months must file their tax returns by the due date, or they may face penalties.

Or, it is not until 12 months of continuous operation that a business can deduct certain taxes at the highest rate.

Data Protection

Data is often compared to the gold of Industry 4.0 and the European Union has strict laws to protect personal data.

As a result, companies that receive or process personal data are subject to the following regulations, which require the consent of the data owner and cannot be transferred outside of the European Union without use. Logical data and data protection protocols.

Rent a place

The laws of each country have different regulations on renting and using space for offices or factories.

The business that rents the business location needs to understand its rights and responsibilities during the lease period and after the move to avoid lawsuits, such as the lessee’s rights to the attached assets.

If there is a breakdown, what are the responsibilities of the lessee and the lessor? Can the lessor arbitrarily increase the rent? Who will pay for utilities, maintenance, security, and other services while you are at work?


Disputes can still occur between businesses and employees, partners, customers, or some other cases. Enterprises established abroad should pay attention to dispute resolution procedures through lawyers to ensure legal liability and additional costs.

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