It is important for international business people to have an understanding of the different legal systems around the world. Companies must take into consideration the legal structures of the country they operate in. Globalization breaks down barriers between nations. But increasing investment among nations also makes it more difficult for those in different cultures to understand the rules of other countries.
International Business Laws
Businesses operate in a world in which the laws of different governments and judicial systems might conflict. It is therefore necessary to have a basic knowledge of the legal system and how business law impacts commerce in the company’s own country and abroad. The impact of international business on business law mandates the inclusion of standards in their company regulations or operations that address these complex issues.
Business law standards should include performance expectations related to the laws of different countries. Businesses need to understand that state, territory, province, or federal law must sometimes work in conjunction with international law. Technology, too, has significantly affected business law, and, therefore, these standards need to be addressed because of its emerging importance in the workplace.
Information technology, for one, gives institutions unprecedented ability to serve customers beyond national borders. In reaching out to these customers, however, organizations face unprecedented complexities brought about by differences in legal and regulatory environments such as but not limited to different consumer protection laws, record-keeping and reporting requirements, privacy rules, and money laundering laws. Institutions must find ways to effectively handle these legal risks they face in the process of their operations.
The business should concern itself with the laws on contract law, law of sales, and consumer law, agency and employment laws, property law, computer law, environmental law and energy regulation, domestic relations laws that apply to marriage, divorce, and child custody and wills and trusts to determine the appropriateness of wills and trusts in estate planning.
What to Consider in the Work Contract
When it comes to hiring staff, the business should concern itself with contract law, agency and employment laws, domestic relations laws that apply to marriage, divorce, and child custody to determine the appropriateness of staffs being selected to the position. Concepts of acceptable business practices would differ in business environment in other places. During the process of recruitment and selection of candidates the following rules and regulations should be delineated in the contract:
- Work hours – some countries permit only 8 hours' work per day, five days a week, nine to five. Some countries may permit more than 8 hours but with overtime pay.
- Sexual harassment - sexual harassment laws are in full force in some countries. The company policy should make mention of this fact and what to do in cases where violation of the policy is committed.
- Standard pay – each country has its standard pay or minimum wage requirements. Critical positions also have a pay range higher than the standard pay. It is important to determine ahead how much should be the acceptable salary rate for the kind of work/position you are hiring.
- Holidays – some countries have extended holidays like Christmas or Ramadan. In some, they have holidays for boxing day. Others do not celebrate boxing days. So it is good to know beforehand what are the required holidays legally approved by the government. Workers who work during legal non-working holidays are paid higher, usually their normal pay plus 100% of their rate.
International business laws impact the operation of the company. Understanding the different legal systems in which the business operates in is critical to the company's success and growth.
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