Legal Concepts Relating to International Business
International Business is a term used to describe all commercial transactions (investments, sales, private and governmental transactions, transportation and logistics) that take place between two or more nations or two or more business that operate in different countries.
Typically in International Business, corporations or private companies will undertake deals or conduct transactions for profit, while governments undertake such business objectives for political purposes.
International Business is a broad term, which refers to all business activities that involve cross border transactions of services, goods, and resources between two or more nations.
The transaction of economic resources in International Business include the transfer of capital, skills, assets, people etc. for the international production of tangible goods and services. Typically these transactions are conducted for construction, finance, banking, or insurance purposes.
Companies that engage in International business are referred to international corporations or multinational enterprises. These companies engage in a worldwide approach to market and produce goods in multiple nations. Examples of such companies include McDonalds, Yum Foods, Toyota, the Ford Motor Company, and Samsung.
The International Legal Environment
- Public international law is the system of rules and principles governing the conduct of and relationships between states and international organizations as well some of their persons.
- Private international law governs relationships between persons and organizations engaged in international transactions and addresses which laws will apply when the parties are in a legal dispute.
- Foreign law is a law enacted by a foreign country.
International Business law is the scope and practice of law in the global business market. International Business law includes a direct focus on economics and the law in relation to international commercial transactions, licensing procedures, tariffs and taxes, and other intricacies which are used to regulate international transactions between government entities or multinational enterprises.
International law varies between jurisdictions; the premise elaborates basic business law concepts by expanding them to an international field.
International law is typically related to trade or commerce that takes place between two nations or two companies that operate in separate countries. The laws of different jurisdictions will come into play in each transaction; an analysis of such laws for each jurisdiction must be observed and understood by the engaging parties prior to the affirmation of the business deal.
The foundation of international business law is rooted in trade agreements and the laws which regulate such transactions. Two or more countries, who join together for a specific trade agreement, must meet the specific regulations instituted by each practicing nation’s interpretation of international business law.
In addition to trade agreements, international business law will administer, regulate and subsequently deliver licenses. These licenses are needed to either conduct business in a foreign nation or are required to partake in a transaction for a specific good or service. Additionally, licensing requirements will also encompass various intellectual property or tangible property that is being exchanged between two parties.
For instance, a company operating in one country may develop a specific form of intellectual property; this company may then produce their product in another country, or may license other companies the right to produce the product. As each transaction or agreement is negotiated, the licensing rights and the exchange of property are the fundamental aspects of international business law and the primary focus of the commercial transaction.
Tariffs, taxes, and other mechanisms which surround a business transaction will vary by jurisdiction. Typically, there are basic provisions for a country that may be modified by trade agreements among different nations; these issues must be considered when a party negotiates each transaction.