Mithras Law Group International Business Blog

Global Immigration and Business Solutions

Avoiding Pitfalls in Selecting an International Business Partner

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As part of our international business law practice, our job involves making sure that our clients select their international business partners and relationships with caution so as to avoid disputes down the road.  Although it may be common sense advice that every business needs to do their due diligence and identify their business partners carefully, it is not always that straight-forward.

There are many variables from geographic locations, varied legal systems, cultural and language barriers, foreign market risks coupled with a lure of increased earnings and potential of reaching global markets that can taint a business owner’s decision making. This article addresses the preliminary steps required and does not address other substantive issues which must also be considered in selecting an international business partner. Proper researching and evaluation of relevant information from the potential business partner is essential to develop and ensure long-term business relationships, trust and accountability.  The most important step is to confirm that your prospective international business partner is legitimate, which means making sure that the business is registered and has legal standing in the foreign jurisdiction and exists as a separate legal entity. If your prospective business partner has no legal standing in the jurisdiction it is doing business then any judgment or legal order issued against it is unenforceable and worthless.  So, ask to see an incorporation certificate or the equivalent in the jurisdiction.

Next, conduct a background check and obtain as much information as possible on the potential business partner before entering into any contract or agreement with them.  As part of your due diligence do not hesitate to ask for the company’s history, sales record, customer demographics, marketing and sales policies as well as remember to verify the company’s trade and bank references. Check the company’s online presence, including website and any relevant Google links or reviews. These are all important indicators of the company’s performance and can save you both money and time in the long run. In markets where business risk is much higher, it is also not unusual to ask for the company’s business license. There are several commercial resources, governmental resources, and risk analysis firms that offer business intelligence. The US Commercial Service offers an international company profile for detailed background checks on international companies and a business can also obtain an international credit report from agencies like Kroll, Equifax, Owens Online, and the like, which can help in pre-qualifying your prospective international business partner.

Using the above mentioned guidelines as the initial investigative step in your search for an international business partner can help minimize your exposure and avoid commercial disputes.

 

 

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Written by MithrasLaw

April 6, 2011 at 7:11 pm

India Releases New Consumer Price Index (CPI)

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The Indian Government on this past Friday has released a new price index so as to help the Indian Government and the Reserve Bank of India to tackle and measure inflation for the economy. The data put out by the government on Friday assumes a base of 100 for the whole of 2010 and peg the index for January 2011 at 106.

According to the WSJ India’s move is part of a wider effort by the government to address inefficient and archaic data-collection processes and outdated inputs that have hampered obtaining timely and accurate readings of price trends essential to central bankers, government officials and financial market participants. To read more click here:  http://online.wsj.com/article/SB10001424052748704900004576151670008414278.html?mod=googlenews_wsj

Written by MithrasLaw

February 21, 2011 at 9:06 pm

Posted in BRIC, International Business

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U.S. Department of Commerce announces import and export figures for 2010

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The Commerce Department recently reported that the U.S. exports grew by 17% to $ 1.8 trillion last year. Imports on the other hand jumped nearly 20%, widening the annual trade deficit up to almost $498 billion, a 32.8% increase that marked the biggest percentage gain in a decade.

Written by MithrasLaw

February 21, 2011 at 8:38 pm