June 2007

INTERNATIONAL EXPANSION - IS YOUR BUSINESS READY?

Stephens Lawyers & Consultants' Principal, Katarina Klaric was one of the expert presenters at a seminar held by the Victorian Exporters Club on 7 June in Melbourne.

The Victorian Exporters Club was formed by the Australian Information Industry Association (AIIA). The club works to assist member companies and the wider ICT industry to achieve sales in overseas markets by helping them locate and appoint sales channel partners.

The seminar included an overview of South East Asian markets, with expert presentations on legal and intellectual property aspects, financial management and banking.

Katarina's presentation covered risk minimization when expanding into international markets, including:

  • Choosing the right Channel Partner
  • Protecting IP assets
  • Structuring international expansion to protect Australian operations
  • Compliance with local laws
  • Appropriate insurance and payment arrangements.

Is your business ready to go international now?

Successful international expansion can be rewarding and result in business growth and profits. However the process is complex and demanding, and may not suit every company. An ad hoc decision to expand overseas, without careful planning, assessment and understanding of the market and its regulatory systems, could potentially destroy the Australian operations.

If you are considering international expansion of your business, the checklist below is a useful starting point.

  • Does your business involve competitive products or services which can be easily adapted for supply, or be supplied into overseas markets?
  • Is your existing production capacity sufficient to support overseas generated sales, or do you need to expand in order to export?
  • Do you have sufficient personnel to provide any training, documentation and support required to operate in offshore markets, or do you need to expand?
  • Do you have sufficient capital, cash flow or access to finance over an extended period (3-5 years) to support the additional costs involved to export or expand overseas?
  • Are your Board, CEO and management team committed to overseas expansion?
  • Do you have the time to undertake market assessment and development work required for expansion including travelling and visiting the target markets?
  • Do you have existing staff with expertise in export and international business, or will you have to hire new staff or engage external consultants?
  • Do you have an International Business Development and Marketing Plan?
  • Have you identified potential export markets and undertaken market assessments?
  • Have you undertaken an assessment of the investment required to expand in the target markets and forecast financial returns? Does the investment equate to increased profits?
  • Have you identified your intellectual property assets to be exposed in the target markets (trademarks, brand names, logos, domain names, copyright, designs, patents, confidential information and trade secrets) - and have you checked that your trademarks, brand names, or logos do not have negative meanings in an overseas market?
  • Have you undertaken searches to ensure that you can market, sell or otherwise distribute your product without infringing third party intellectual property rights?
  • Have you registered or otherwise protected your intellectual property in the proposed markets?
  • Have you assessed the most effective method of structuring your operations in the proposed markets and ensured protection of your Australian operation?
  • Do you have confidentiality and/or non disclosure agreements ready to approach potential channel partners?
  • Do you have the necessary permits, licenses and clearances to market, sell or otherwise distribute your product?
  • Do your products comply with local manufacturing standards and requirements?
  • Do your products' labelling, packaging, advertising and marketing materials comply with local law?
  • If you are proposing to use existing Australian supply or other agreements, have they been reviewed and adapted to comply with local law?

If you have answered "yes" to most of these questions, your business has a strong foundation in place for successful overseas expansion.

There are a number of different options available for international expansion, including:

  • Direct sales from Australia
  • Agency agreements with local partners
  • Franchising your business
  • Licensing
  • Local distributors or resellers
  • Joint venture - either partnership or collaboration
  • Set up a branch office or local sales office
  • Set up a subsidiary company

The vehicle ultimately chosen to expand your operations will be influenced by a number of factors, including:

  • Financial resources and personnel
  • Economic and financial incentives offered to foreign investors
  • Taxation issues
  • The local regulatory or legal system
  • Your overall aims, goals and expectations for the local market

Stephens Lawyers & Consultants can assist you with developing and implementing strategies to enable you to achieve this business goal. We represent leading international businesses and have over 20 years' experience in international trade.

For further information contact:
Katarina Klaric
Principal
Stephens Lawyers & Consultants
Level 3, 530 Lonsdale Street
Melbourne VIC 3000
Phone: (03) 8636 9100
Fax: (03) 8636 9199
Email: katarina.klaric@stephens.com.au
Website: www.stephens.com.au

All Correspondence to:
PO Box 13286
Melbourne Law Courts
Melbourne VIC 3000

To register for newsletter updates and to send your comments and feedback, please email stephens@stephens.com.au

Disclaimer : This newsletter is not intended to be a substitute for obtaining legal advice .

© Stephens Lawyers & Consultants, June 2007

Subscribe/Unsubscribe