There are many reasons that organizations want to expand overseas, including those listed. However, there are also many problems associated with doing business abroad, particularly in countries that are outside of the Western developed world. Language difficulties, less developed infrastructure, and cultural differences can present problems to organizations. In this paper, the focus is on looking briefly at the legal, cultural, and economic factors that businesses should consider before beginning overseas expansion.
Periodically one reads about a businessman from this country who has been exposed as offering bribes to government officials or private parties in other countries in order to smooth business operations in that country. In some countries this is expected, but it is also illegal in this country. Business owners are subject to the Foreign Corrupt Practices Act which makes it illegal to bribe people for the purpose of obtaining or retaining business or influencing a discretionary decision. Business owners may make legal payments to facilitate government action, but not influence discretionary decisions. Business owners who are concerned about the legality of specific actions are able to request the opinion of the Department of Justice regarding any proposed business conduct.
Besides being subject to the laws of the United States, a business owner is subject to the laws of the country to which the business has expanded. Business law covers a wide range of topics, such as contracts, copyrights, incorporation, environmental issues, foreign investment, fraud, joint stock companies, labor relations, patents, sales, securities, and shipping, among others. These may be quite different from laws in the United States and may be more stringent for foreign operators than for nationals, as with shipping and sales requirements.
For example, Taiwanese law requires all foreign shipping companies and their agents to register...