Going Global

International expansion is very appealing but, at the same time, a quite challenging and extremely demanding issue

that requires professional legal advice.

Michalis Economides, Advocate & Legal Consultant, CEO of Chambersfield Economides Kranos Law firm  |  Article Publication: Gold Magazine October 2019

When a company is looking to expand internationally, there are lots of factors to be taken into consideration if its overseas business operations are to be successful. For this reason and based on my international expertise, I am inclined to believe that entrepreneurs need to thoroughly consider all the factors before deciding to engage in overseas operations.

I would recommend that they consider the following three questions when assessing the possibility of expansion:

• Is my firm ready for overseas business operations?

When entrepreneurs are in the process of deciding whether to step into another market, they must be fully prepared and aware that the decision making process can be very stressful and demanding. Therefore, when they initially start considering their  firm’s international expansion, they must first decide if their business is “ready to go internationally” and, secondly, identify their differentiation strategy and how it will be communicated in the new market.

In addition, entrepreneurs need to scale and evaluate their financial resources, development strategies, business models and the potential new challenges that may arise when they enter the new market. Moreover, it is also very important to consider the regulatory framework in which the firm will be operating, to make sure it complies, as it is well known that all business operations and transactions are regulated by both international and national legislation.

Furthermore, international expansion requires an investment budget to be allocated to the establishment of business operations, including the formation of a new local legal entity, the establishment of a local branch, networking and building relationships, travel, local representation and much more.

Undoubtedly, globalization has made expansion into foreign markets considerably easier while technology has simplified everything as it directly connects businesses with the whole world. However, to smoothen and make the business operate successfully, there are numerous legal and due diligence aspects to be dealt with by legal professionals.

Consequently, it is highly recommended that, during the initial stage of the expansion in particular, entrepreneurs should collaborate with a law firm that has significant experience in international market expansion so as to safeguard their business operations, mitigate risks, monitor the overall project, fully prepare and handle all the necessary documentations and paperwork needed via the regulatory authorities of the selected market, as well as monitor all the legal aspects of the new business operation.

• How will my firm’s core values adapt to the requirements of the new market?

All countries have different cultures and habits; companies, therefore, need to adjust their approach and adapt to the reality of each country in which they plan to operate.

There are several models for a company to follow when going global, in order to obtain know-how about the market. For instance, companies may:

i. cooperate with local companies that have already established businesses and which offer similar services/products and wish to
expand their portfolio.

ii. proceed with a Joint Venture with a local company or a company with a substantial presence in the selected market.

iii. establish a franchise model that they can promote in selected markets.

iv. start a local branch through the incorporation of a new legal entity and hiring local human capital.

v. expand their online presence into other markets.

• Why is cooperation with a law firm essential?

Regardless of the chosen business model, the experienced legal advisors in a law firm possess the knowledge and know how that will ensure the interests of the parties involved and will include clauses in the agreement that are fully compliant with the provisions of the specific national law governing business activities and transactions.

Consequently, it is of the upmost importance to choose the right legal consultant who, together with the entrepreneur, will create the most favourable conditions for achieving growth strategies and international expansion.

Thus, my advice to entrepreneurs who are interested in expanding their business, is that they should engage in consistent and continuous cooperation with an accredited law firm that specializes in corporate, commercial and employment issues and has
international connections. Through such cooperation, each entrepreneur will ensure that his strategies are properly implemented
and aligned with all the procedures of the legislative framework.

It is no coincidence that many modern companies cooperate with law firms on an annual basis, for the provision of legal and advisory services and to safeguard their relationships with customers, associates, partners, affiliates and employees.

As a lawyer and businessman myself, I am inclined to believe that all entrepreneurs, should have a thorough knowledge of the legislative and business framework governing their chosen market before implementing any strategy and be prepared with all the necessary legal documentation needed and safety measures in place, in order to avoid any negative consequences that may result from misconduct.