Expanding your business often means reaching into new jurisdictions. As a strategic business owner or manager, you will undoubtedly have done your research regarding the ease or difficulty of penetrating new markets, the economics differences in play, the competition in potential new jurisdictions, and other issues impacting the cost of expansion and the projected profitability of the move.
Advising and Qualifying Entities to Do Business in Additional Jurisdictions
However, you cannot afford to overlook the legal and governmental barriers to entry. The ideal time to consult an attorney experienced in helping organizations expand into new geographic areas is before you have settled on a target area. When you get legal advice early in the process, you can factor in the cost and timeline associated with operating in the new jurisdiction.
Domestic and International Jurisdictions
Domestic expansion of a business often involves fewer barriers and a shorter, less expensive process than moving into the global economy. However, even expansion into a neighboring state requires research and planning. In some areas, even expanding into a neighboring city may have legal ramifications.
For example, in some areas of the United States, individual cities have their own minimum wage requirements, or impose obligations on certain types of business owners that go beyond state law. One common arena in which the business owner may face differing regulations and restrictions simply by crossing from one city or town into another is in residential real estate rentals, as it is not unusual for a municipality to impose additional obligations on landlords. Another is the building trades, since cities and counties may have more stringent building codes or permitting processes than their neighbors.
This type of discrepancy may arise within virtually any industry, from city to city, state to state or country to country.
Expanding Your Business from One U.S. State to Another
Factors to investigate when considering expanding your business from one U.S. state to another include:
- Registration requirements and legal process
- State-specific regulations that may impact the operation of your business, such as:
- Security and privacy requirements
- Labeling and other disclosure-related regulations
- Advertising restrictions
- Record-keeping requirements
- Liability issues relating to your industry
- Differing licensing requirement within your industry
- Employee protections and minimum wage requirements
Of course, which of these questions apply to your business and to what degree will depend on the specific states involved, your current operating procedures and your industry. Depending on the nature of your business and the new jurisdictions you are assessing, there may be additional considerations as well.
An attorney experienced in expansion across jurisdictions can help you identify the issues that might impact the expansion of your business into a particular state, and can provide the answers you need to make good decisions about your next steps.
International Business Expansion
Expanding into a foreign country may carry additional considerations. The requirements and potential barriers created by the laws and regulations of the target country may vary significantly, making some countries much more accessible than others. However, there are some considerations that must be assessed regardless of the target country, such as the U.S. tax ramifications of the expansion.
Gathering the information required to make a smooth expansion into a foreign market can be particularly difficult for a number of reasons: language and cultural barriers may make it difficult to find and understand the necessary information, and differing legal structures may mean issues and requirements that would never have occurred to most U.S. executives.
When you work with an attorney who has extensive experience in the international business arena and has successfully assisted clients with expansion into new jurisdictions, you can move forward with confidence.
Get the Help You Need to Expand Into a New Jurisdiction
Whether you are seeking to expand your business into a nearby metropolitan area, across state lines or into international markets, understanding the legal and regulatory issues associated with moving into a particular market should be among your first steps. You cannot afford to make the investment in an expansion only to discover that unanticipated legal issues make the expansion significantly more expensive than you anticipated, rendering your timeline impossible or otherwise interfering with your plans.
When you work with one of our experienced attorneys in the expansion process, we will not only ensure that you have the information you need to choose your expansion target, but also assist you every step of the way in complying with the new jurisdictions requirements. Contact KPPB LAW for more information.