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9. Understand the legal and regulatory environment of your target market

Understand and plan for the specific legal and regulatory standards of your target market – and in particular, the risks associated with your product or service. In some countries, certain products and services may be restricted and cannot be offered by foreign companies. These limitations may include the provision of financial, legal and education services, and/or products that may be subject to trade barriers through a 'negative list’.

Confirm if the licenses and professional qualifications you currently use domestically are recognised in your target market. Recognition of licenses and professional qualifications may be due to a mutual recognition agreement between governments, or through an internationally recognised standard defined by leading industry associations or larger organisations. For example, CISCO offers a range of certifications on network programming and data administration and plays a large part in defining the global industry standard. It is recommended that you contact the appropriate government department, industry association or organisation to confirm whether or not your license or qualification is recognised.

Before entering your new market, ask yourself the following:

Is your Intellectual Property (IP) protected?

How you register IP depends on the product type, protection and the country of registration. The process, time and cost of registering IP may vary from country to country.

It is crucial for you to register your IP ahead of entering your overseas market, as some countries, like China and South Korea, apply the first-to-file system – meaning, no evidence of prior use or ownership is required when registering IP, leaving registration of popular foreign marks open to third parties who register ahead of the legitimate owner.

According to Australia’s International Business Survey 2018, IP-related activities (creative works protected by patents, copyright and trademarks) were deemed “essential” or “very important” for 70% of Australian businesses who participated in the survey, further highlighting the importance of IP protection when engaging international markets.

IP Australia administer IP rights and legislation relating to patents, trademarks and designs, and advise government and Australian businesses both locally and abroad. There are a number of resources to help you take your IP global, including country specific information on IP protection and registration. Specific information is available for the following countries/region:

To assist Australian businesses to navigate the Chinese IP system, IP Australia have appointed an IP counsellor to China. This service is not currently available for any other market. However, the authority responsible for IP protection in each of the above listed countries has been included and should be used as a point of contact to provide support.

The World Intellectual Property Organization provides information on international IP protection, as well as international trade agreements and conventions for the protection of IP.

The Export Market Development Grant (EMDG) administered by Austrade reimburses eligible Australian startups up to 50% of the cost of granting, registering, or extending rights under foreign laws in relation to eligible IP (up to a maximum of $50,000 per application).

What are your tax obligations?

Your tax obligations will be affected by tax treaties between Australia and other countries and by the scale and nature of your business.

You will need to meet the corporate and individual tax obligations of both Australia and your overseas market, as well as any other tax-related requirements.

Information on corporate and individual taxes for 153 territories worldwide is available through PwC’s Worldwide Tax Summaries page.

What are the accounting standards and requirements of your target market?

Accounting standards and requirements can vary from market to market, therefore it is important that you understand the specifics of your target market before entering. As an example, companies in China are required under law to file their annual income tax returns and statutory audited financial statements to local tax authorities within five months of the end of the tax year, and the audit must be conducted by a certified public accounting firm registered in China.

Before entering your target market, ask yourself the following questions:

  • What accounting standards must you comply with as a foreign business?
  • What is the standard accounting period of your target market?
  • In what language and currency must all accounting records be maintained?
  • Should accounting records be kept in hard copy or soft copy?
  • Where are accounting records required to be kept?
  • For what period must all accounting documentation be kept?
  • What financial statements must be prepared under the accounting standards of your target market?
  • What are the audit requirements of your target market?
  • Are there special provisions for foreign workers?
  • How should the company seal be managed, used and retained?

IFRS Standards, a single set of global accounting standards, are now required in more than 140 jurisdictions, with many others permitting their use. That said, many companies adopt their own variation of the IFRS Standards. For example, in Japan, the most commonly used standard is the Japan Generally Accepted Accounting Practices (J-GAAP), established by the Accounting Standards Board of Japan.

For a list of IFRS Standards, visit the IFRS website.

Is your data protected?

It is crucial that you have a strategy in place that specifically outlines how data – from financial records, to customer information – will be stored and made secure when taking your product or service to an international market. 

The legal and business implications of poorly managed privacy and data security practices are too important to ignore. A single error can undermine the trust of investors and customers, attract unwanted regulatory attention or litigation, and ultimately result in both your domestic and global ambitions failing.

Ignoring your data storage, privacy or your security obligations is likely to become an issue when engaging well-established customers or business partners, as they will expect you to have governance frameworks in place that are of a high industry standard. Be transparent about how you plan on handling personal information and give customers and investors confidence that it will be managed securely and appropriately.

You must consider your internal governance processes, as they will define who is allowed to access certain data and what it is to be used for. Collecting too much data from your customers can result in a breach of compliance. Define what data is expected to be collected, as well as how it will be used, stored, transferred and destroyed.

If you decide to hire a third party to manage your data and operational needs, you will still hold primary responsibility for what happens to that data, therefore it is important that you still consider how your data is managed. Make sure your commercial arrangements cover how personal information will be handled.

Startups looking to enter markets such as the US, Canada, and parts of Europe, need to be aware of the strict data protection laws in place. Global law firm, DLA Piper, has an interactive map highlighting the strength of ‘regulation and enforcement’ of data protection laws for various markets around the globe. For more information and to compare the data protection laws of various markets, visit the DLA Piper website

The General Data Protection Regulation (GDPR) is a European Union (EU) law, applicable to all member states of the EU, which builds on previous pieces of data protection laws. GDPR takes into account the accelerating world of international e-commerce and offers a more detailed and up-to-date set of norms for handling personal data of company’s client base. If you are planning on taking your product or service to Europe, it is important that you comply with GDPR. To help you get GDPR complaint, the EU has put together a GDPR checklist.

If you require more information, the Australian Government, Office of the Australian Information Commissioner, has a series of guides that provide detailed advice and guidance on how to manage and secure data.

How will you write contracts and resolve disputes?

Contracts should be clearly worded, highlighting rights and obligations, and dispute resolution procedures. Contracts are best drawn up by an experienced lawyer who knows your business and the intricacies of your particular market well.

If you are planning on exporting, you should consider including the following in your export contract:

  • Description of goods, sufficiently detailed to avoid any dispute between exporter and importer and enabling the correct classification to be applied by customs on arrival
  • Price
  • Payment terms, which are usually agreed during negotiation and should be clearly stated to avoid misunderstanding and dispute
  • Fees and charges, including what you and the buyer are each responsible for
  • Allocation of responsibilities for freight and insurance
  • To what extent the Australian exporter accepts liability for loss subject to upper limits, or loss caused to third parties
  • Packing details, so buyers know how the goods will be packed in terms of numbers of units, weights and dimensions – this will have implications for transport and storage of goods on arrival in market
  • Choice of law, where the state of jurisdiction determines the law under which disputes (including arbitration, conciliation or other means of settlement) will be conducted

If relevant, contracts should include information specifically outlining how data – from financial records, to customer information – will be stored and made secure.

Importantly, make sure you specify which language version of a contract is to prevail in the event of a discrepancy.

Companies involved in international commercial disputes should seek appropriate legal advice in Australia or overseas. Austrade can provide referrals to legal service providers. For more information, visit Austrade’s Programs and Services webpage. Alternatively, you may wish to contact the Australian Chamber of Commerce in your respective market. 

Several international arbitration commissions exist to facilitate international dispute resolution. Deciding which arbitration body best suits your commercial needs is complicated, and requires the balancing of many considerations. The decision will depend on a combination of convenience, cost and the facts of the particular case. For information on the settlement of commercial disputes and procedural aspects of arbitration, visit The International Chamber of Commerce on Arbitration website.

Can you leverage Free Trade Agreements (FTAs)?

Australia has entered into 11 FTAs with both individual countries and groups of countries and is currently negotiating additional agreements. FTAs benefit Australian exporters and investors by reducing and eliminating certain barriers to international trade and investment, therefore should be leveraged to improve your competitive position in market.

FTAs don’t just improve market access by addressing tariffs - they also hope to make improvements to trade and investment activity as it relates to areas such as: e-commerce, IP, competition policy, government procurement, movement of business people, and enhanced protection and dispute settlement mechanisms for investment.

The following FTAs are currently in force:

  • Australia-NZ (ANZCERTA or CER)
  • Singapore-Australia (SAFTA)
  • Australia-US (AUSFTA)
  • Thailand-Australia (TAFTA)
  • Australia-Chile (ACl-FTA)
  • ASEAN-Australia-New Zealand (AANZFTA)
  • Malaysia-Australia (MAFTA)
  • Korea-Australia (KAFTA)
  • Japan-Australia (JAEPA)
  • China-Australia (ChAFTA)
  • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

There are a number of FTAs concluded but not yet in force:

  • Australia-Hong Kong Free Trade Agreement
  • Indonesia-Australia Comprehensive Economic Partnership Agreement
  • Peru-Australia Free Trade Agreement
  • Pacific Agreement on Closer Economic Relations (PACER) Plus

FTAs under negotiation:

  • Australia-European Union Free Trade Agreement
  • Australia-Gulf Cooperation Council (GCC) Free Trade Agreement
  • Australia-India Comprehensive Economic Cooperation Agreement
  • Environmental Goods Agreement
  • Pacific Alliance Free Trade Agreement
  • Regional Comprehensive Economic Partnership
  • Trade in Services Agreement

For up-to-date information on FTAs, visit the Department of Foreign Affairs and Trade website.

The Australia Government Free Trade Agreement Portal provides a platform for users to explore FTAs by country or by product or service.

This list of considerations is non-exhaustive. There are a number of other legal and regulatory standards you must understand and plan for, such as those related to: employing foreign and domestic workers; registering a business; investing funds; buying and leasing residential, industrial and commercial land and infrastructure; and operating in certain industries, like those associated with food products or chemicals.


Case study

Go1-update

"Unsurprisingly, there have been different legal frameworks, which we’ve had to operate under... and then there have been different compliance requirements, from a HR or employment perspective, right through to unique tax or finance regulations."
Andrew Barnes, Co-Founder

Brisbane-based corporate learning startup, GO1.com, is providing “a two-sided marketplace” for professional development and general training, says co-founder Andrew Barnes. Launched in 2015, GO1.com has since raised over $10 million in Series A funding backed by online recruitment giant SEEK and now offers its platform across a number of new markets.

With international offices in Ho Chi Minh City, Kuala Lumpur, Mountain View and Salt Lake City, GO1.com have certainly experienced the regulatory nuances of establishing an entity across foreign jurisdictions. As Barnes explains, it often helps to have the right advice: “One challenge is, you don’t know what you don’t know when entering new markets. There can be a whole set of challenges that you’ll run into.”

Barnes emphasises the importance of anticipating how foreign regulations might impact operations across your business when entering a new market: “Unsurprisingly, there have been different legal frameworks, which we’ve had to operate under - Vietnam probably being the most unique in that respect - and then there have been different compliance requirements, from a HR or employment perspective, right through to unique tax or finance regulations.”

If sourcing external regulatory advice to support your international expansion, Barnes notes that local advisers may not necessarily always be the right solution. “Even if you do engage local advice, there’s the additional complexity that your advisers may not be familiar with working with a foreign-owned entity.” Even with local on-the-ground tax advice, GO1.com still ran into challenges. “The accountants that we had appointed in that region were not necessarily well versed in international ownership structures and the unique obligations which come from that,” says Barnes. “We’ve now established new relationships with advisers in each of our international regions."

For small businesses lacking the extensive resources of a multinational company, Barnes suggests it’s important to first draw on your domestic networks for recommendations when seeking external advice. “In every instance we asked for referrals from our Australian advisers, whether it was legal counsel or financial advice,” he said. This can take time however, and Barnes warns against making any hasty decisions when searching for the right advice: “We didn’t just do a lucky dip and assume that someone who popped up on a Google search was the right fit for us.”