From a legal perspective, the rights and obligations affecting business owners vary greatly from country-to-country, so it is essential to understand the environment you are heading into prior to departure.
From a legal perspective, the rights and obligations affecting business owners vary greatly from country-to-country, so it is essential to understand the environment you are heading into prior to departure. After all, every nation has its own unique foibles and although these may relate to the simplest of issues, the punishment for failing to comply may be more than a touch uncomfortable.
‘The first thing you have to do when you arrive in a country is to make sure you’re doing things right,’ cautions Baker Tilly’s Carolyn Leslie. ‘I worked in South Africa for four years and there were some significant residency issues to overcome. You have to make sure you’re legally entitled to work in a country and while I was out there one senior executive arrived without his work permit in order. He ended up spending a week in a rather infamous South African prison.’
Aside from ensuring your work permits are in order it is also advisable to seek expert advice prior to departure. Most major banks and accountancy firms provide services that will get you up to speed with the key issues in your chosen country.
Moreover, both within and without the EU, legislative burdens can vary greatly. A recent report from accountancy firm Grant Thornton, for instance, noted that in a study of more than 7,000 business owners in 30 countries, 56 per cent of companies in Poland felt that regulation was a ‘major constraint to expansion plans.’ Russia (54 per cent), Greece (53 per cent), Germany (52 per cent) and Holland (50 per cent) also fared badly in the report. The likes of the UK (33 per cent), Canada (30 per cent), France (29 per cent) and Singapore (eight per cent) considered themselves much better off.
‘You will encounter government regulations and red tape in your chosen country. It is therefore important that you employ a solicitor and accountant with an in-depth knowledge of your chosen country.’ Pete Ferns, director of NatWest Business Banking counsels. ‘Much of the red tape that UK businesses encounter is the same across Europe, as they are European Laws. There will, however, be some domestic legislation in place, to which you must adhere.’
To take a specific example, consider the regulations surrounding maternity leave. You may expect these to be fairly consistent right across Europe, but in actual fact the differences are immense and, if you are employing local staff, you must be aware of your obligations.
In Sweden, for instance, women are entitled to up to 96 weeks’ paid leave around the birth of a child (at 80 per cent of their salary for the first 390 days and then a lower rate for a further 90 days). This contrasts sharply with Holland where women are entitled to just 16 weeks’ paid leave, albeit at 100 per cent pay, and Germany, where employers are only obliged to offer 14 weeks.
Payment cycles also differ greatly from country to country and this is something budding overseas entrepreneurs need to be aware of too. In Greece, for example, the average payment period has risen to a staggering 84 days in 2006.
Only by seeking out appropriate advice can you truly hope to understand the issues you will face prior to departure.
