Lessons Learned Doing Business Overseas
Reidel Law Firm represents and transacts business with partners and clients around the globe. In our travels and projects we have had the opportunity to work with many cultures and countries. On rare occasions these projects sour a bit and become a learning experience for us. In this article I’d like to share a bit of my former experiences from around the world.
Social and Business Culture
The social culture of a country and its people are generally a good indicator of expected business norms as well. For instance if it is considered offensive to show up to a dinner late, you better expect that the same holds for a business meeting, no matter how informal. Or if certain topics are taboo in a social setting, like finances, then it would be typical that a business would be more shy about discussing or disclosing certain financials of the business. Don’t be blindsided by these or offended if their social and business culture norms are different than the western business model. There are plenty of approaches to break through a tough business culture and ink profitable deals, they are done everyday. Having local counsel or counsel familiar with the country and their social culture can be an invaluable tool to assist.
One of the most frustrating experiences I have had are in countries with current or former communist backgrounds. The long term focus on reliance on the government and public sectors and bureaucracy has left a legacy of stifling private enterprise and especially individual initiative. I can’t count the times I have seen inefficient business models, companies, and even industries and question why certain things are done. The answer invariably is well its always done this way or it works for us…. I’ve also noticed how these former communist countries have a love for the rubber stamp. If you ever attempt business in Eastern Europe or China you will definitely at some point be given some seemingly insignificant scraps of paper that will be required to have various stamps from other offices. Always leaves me wondering why, haha.
Be Aware of the Language Level
Some countries and regions will have very high levels of english usage, especially in business, while others will have a nearly nonexistent english level. I have been from one extreme to the other around the world. This is one important aspect of doing business overseas to be well prepared and can be remedied before you have boots on the ground. Some major overseas business hubs have extremely good english levels, typically a relic of their Imperial British heritage, like Dubai, Singapore, or Hong Kong.
The english level of countries is sometimes hit or miss but should be one of the main topics of your business prep. In my experience, the former British colonies and outposts have very good english levels throughout society with the exception of recent migrants usually. Also rather surprisingly so some former Eastern bloc nations in Europe. My hypothesis is that the high level of English in these countries is a result of the unfortunate economic stagnation in the last few decades and speaking English being increasingly seen as a necessary skill to emigrate from the country.
Watch for Puffery and Outright Fraud
In the west we have codified both in civil and criminal law the limits and boundaries companies and individuals can engage in puffery or embellishment in sales. Because of our rather strong consumer protection laws and (relatively) easy judicial access for consumers we have a natural tendency to have puffery limited to claims which are proven or are likely to stand when challenged. Do not expect this type of business calculation outside the west. There are no or only very limited restrictions on puffery.
I have seen events and ads overseas that take puffer to the very cusp of outright fraud. Unfortunately, I’ve also been an occasional victim of it in my own business dealings. Always take precautions and the time to commit to some due diligence on any transaction. This can be increasingly difficult given the distance involved and the widespread use of the internet to create convincing puffery. The (very) general advice I can offer is to just take your time and investigate as much as you can about the people, property, and events involved for any transaction you contemplate overseas.
If your business is expanding overseas or exploring opportunities to do business overseas, get Reidel Law Firm on your team to ensure you and your business are protected. Reach us by the email button below or by calling us at +1(832)510-3292.