Importance Of Conventions In International Business

GULATING INTERNATIONAL BUSINESS

1. Introduction:

An International Business Entrepreneur is affected by laws and regulations from many sources not only the laws of its home country or state. Of course, an International Business Entrepreneur must obey with the laws of the city, county, state, and nation that is considered its home or principal place of doing business. An International Business Entrepreneur must also comply with the laws and regulations of the host country or jurisdiction. If the host country is a member of a regional organizational structure, such as the European Community, these laws must also be observed.

Ultimately, international regulations such as treaties or conventions may have an impact on the International Business Entrepreneur and its business enterprise. The remainder of this chapter examines these different sources or levels of regulations.

2. International Controls:

International agreements, treaties, and conventions are becoming progressively more important to International Business Enterprises. The scope of international conventions is no longer restricted to relationships between governments. Of particular interest to International Business Enterprise is the Convention on International Sale of Goods, to which the U.S. Senate gave its guidance and consent in 1987. The Convention on International Sale of Goods is a sort of international uniform commercial code. In fact, the Uniform Commercial Code was used as a model for the Convention. The Convention applies to sales transactions among two parties in different countries if each country has ratified the transaction.

The Convention does not relate to the sale of goods to consumers. The two parties to the transaction can consent that the Conven...

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...ct? Must the capital come from a national or from a specific government run or government-owned bank? Can the International Business Enterprise take certain currencies out of the country? Is there repatriation of profits? Can the International Business Enterprise convert the currency to the host country’s dollars? Control over capital travels can have a big impact on the profitability of the enterprise.

A closely associated type of regulation is tax legislation. Tax legislation can be very favourable for example tax holidays, tax credits, and favourable tax rates. Tax legislation can start out positively and then have an adverse impact on the business.

For example, in Lebanon if you receive tax credits for five years, then you must continue to do business there for an additional five years. The regulation can be positive tax terms as well as negative tax terms.