My law firm represents a fairly substantial number of companies that sell product worldwide over the Internet. This work has given us considerable insight into the legal issues international e-commerce companies often face, and since one of our international e-commerce lawyers recently wrote a client memo analyzing the key legal issues this particular company will face as it ramps up its international business over the Internet, I figured I might as well pull the highlights from that memo and set them out here.
The following is a list of the basic law related questions we typically grapple with when assisting companies that are starting to sell internationally over the internet.
1. What type of legal entity(ies) are you going to want? Where will you want them? These two questions must be answered in tandem.
2. From what countries will you accept purchases? Are you going to accept purchases from every country or will you have some limits? Selling into multiple jurisdictions means you are going to be subject to multiple tax regimes. Who is going to figure out your taxes in each country? Are you going to use a third-party merchant of record to do this for you?
3. Selling into multiple jurisdictions means you are going to be subject to the privacy and consumer protection laws of multiple jurisdictions. We need to know the jurisdictions in which you will be selling to know what laws will apply to your company. Many countries have very strict shipping date and return requirements.
4. Selling into multiple jurisdictions means we will need to consider in which of these jurisdictions it will make legal and economic sense for you to secure a trademark, copyright and/or patent. In what countries do you anticipate having your greatest volume of sales?
5. Is your product legal in all of the countries to which you intend to sell it? Is it legal for foreign companies to sell that particular product into all of the countries in which you intend to sell it? Is it legal in your home country to export your products into all of the various countries in which you intend to sell them?
6. It would be nice if we could set you up with one law applying everywhere in the world, but most countries do not allow this when it comes to selling consumer goods. So we are going to have to discuss where you will be focusing your efforts.
7. Are you going to sell your products in local currencies or in just the major ones or in just dollars? Are you aware that some countries forbid its citizens from using foreign currencies?
8. Are the electronic contracts you propose using enforceable in all of the countries in which you will be selling?
9. Let’s talk about dispute resolution. Arbitration? Where? Will all of the countries in which you are selling enforce this? Many will not enforce an online provision requiring their consumers to arbitrate in a foreign country.
Not that easy, is it?