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How does the legal environment affect international business
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GULATING INTERNATIONAL BUSINESS 1. Introduction: An International Business Entrepreneur is affected by laws and regulations from many sources not only the laws of its home country or state. Of course, an International Business Entrepreneur must obey with the laws of the city, county, state, and nation that is considered its home or principal place of doing business. An International Business Entrepreneur must also comply with the laws and regulations of the host country or jurisdiction. If the host country is a member of a regional organizational structure, such as the European Community, these laws must also be observed. Ultimately, international regulations such as treaties or conventions may have an impact on the International Business Entrepreneur and its business enterprise. The remainder of this chapter examines these different sources or levels of regulations. 2. International Controls: International agreements, treaties, and conventions are becoming progressively more important to International Business Enterprises. The scope of international conventions is no longer restricted to relationships between governments. Of particular interest to International Business Enterprise is the Convention on International Sale of Goods, to which the U.S. Senate gave its guidance and consent in 1987. The Convention on International Sale of Goods is a sort of international uniform commercial code. In fact, the Uniform Commercial Code was used as a model for the Convention. The Convention applies to sales transactions among two parties in different countries if each country has ratified the transaction. The Convention does not relate to the sale of goods to consumers. The two parties to the transaction can consent that the Conven... ... middle of paper ... ...ct? Must the capital come from a national or from a specific government run or government-owned bank? Can the International Business Enterprise take certain currencies out of the country? Is there repatriation of profits? Can the International Business Enterprise convert the currency to the host country’s dollars? Control over capital travels can have a big impact on the profitability of the enterprise. A closely associated type of regulation is tax legislation. Tax legislation can be very favourable for example tax holidays, tax credits, and favourable tax rates. Tax legislation can start out positively and then have an adverse impact on the business. For example, in Lebanon if you receive tax credits for five years, then you must continue to do business there for an additional five years. The regulation can be positive tax terms as well as negative tax terms.
That said, we agree that the core of commercial transactions and the Uniform Commercial Code are fundamental bases for international commercial transactions. Over the years, all laws have influenced society to shape their format into better laws more applicable to the reality of each time. The same has happened with the UCC, to better serve the demands of today’s business commerce. The UCC serves today as such a complete version for business transactions that common law will only apply when the Code is not spoken. One example of this situation is that prior to the adoption of the UCC, sales contracts were governed by the common law of contracts.
To widen the market and to narrow the competition is always the interest of the dealers... The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted, till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to opprress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Together with the common law, the Uniform Commercial Code is one of the primary sources of contract law in the United States. The Uniform Commercial Code is commonly known as the UCC, that have been promulgated in conjunction with a purpose to harmonize the law of sales and other commercial exchanges within the U.S. As a model law, it's really proposal that each state has to choose whether to adopt or not but the code was enormously successful that it has been enacted in all of the 50 states, although with variations. Once they are adopted by the states they become state statute. Among other things, Article 2 of the UCC governs transactions for the sales of goods that are moveable items and they have to be tangible. The UCC also provides different provisions relying upon whether parties to a contract are merchants or non-merchants (referred to individuals who don't have expert knowledge about the goods he/she deals in).
“Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations is declared to be illegal.”
The next section will illustrate the way in which separate commerce businesses function in the international legal atmosphere and to recognize any of the domestic and worldwide matters, which affect the assorted industry configuration and how those concerns can be successfully handled. Lastly, the paper will contain information about Sport Bar Franchise documents that are needed to initiate the business in the state of Maryland.
Political and legal considerations were given first priority in this analysis with primary emphasis given to whether a country's legal or political system prohibits or impedes foreign investment. If a country's political or legal system discouraged or prevented foreign investment, that country was disqualified from further consideration. Factors considered when assessing the political and legal environment:
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005). Doing business overseas has its challenges as well as it rewards.
...MENT ENCOURAGEMENT OF GLOBAL BUSINESS FOREIGN GOVERNMENT ENCOURAGEMENT Governments also encourage foreign investment. The most important reason to encourage investment is to accelerate the development of an economy. An increasing number of countries are encouraging investments with specific guidelines toward economic goals. MNCs may be expected to create local employment, transfer technology, generate export sales, stimulate growth and development of the local industry. US GOVENRMENT ENCOURAEMENT The US government is motivated for economic as well as political reasons to encourage American firms to seek opportunities in the countries worldwide. It seeks to create a favorable climate for overseas business by providing the assistance by providing the assistance that helps minimize some of the troublesome politically motivated financial risks of doing business abroad.
International business contains all business transactions private and governmental, sales, investments, logistics, and transportation that happen between two or more regions, nations and countries beyond their political limits. Generally, private companies undertake such transactions for profit governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources includes capital, skills, and people. for international production of physical goods and services such as finance, banking, insurance, and construction.
International trading has had its delays and road blocks, which has created a number of problems for countries around the world. Countries, fighting with one another to get the better deal, create tariffs and taxes to maximize their profit. This fighting leads to bad relationships with competing countries, and the little producing countries get the short end of this stick. Regulations and organizations have been established to help everyone get the best deal, such as the World Trade Organization (WTO), but not everyone wants help, especially from an organization that seems to help only the big countries and those they want to trade with. This paper will be discussing international trading with emphasis on national sovereignty, the World Trade Organization, and how the WTO impacts trading countries.
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
International organizations create space for its members to coordinate interests and actions which helps promote interdependent relationships among them and strengthens their legitimacy. As society has progressed, it has globalized, and in the past 50 years states have had to address their growing dependence, especially in the economic sector. The World Trade Organization (WTO), is an institution which has an immense impact on the international political economy and the way states function within the international system. It organizes agreements and treaties which govern how its members decide policies, tariffs, and keeps states accountable for their actions. For example, the General Agreement on Tariffs and Trade (GATT), determines how states can regulate their import and exports. (Hurd 2014,
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.