INTERNATIONAL BUSINESS LAW Research Paper Example | Topics and Well Written Essays - 1750 words

INTERNATIONAL BUSINESS LAW - Research Paper ExampleAlongside this matter is the important consideration of the cost entailed in doing calling in the Russian Federation. Possible Legal Risks Involved There are several legal issues, some of which take the form of risks, elusive when entering a foreign market. Legal issues involved laws that affect the conduct of a particular business in a particular place. Laws that will be involved in conducting a business in Russia will be, necessarily, Russian commercial laws, international trade laws and international sales transactions and regulations. The risk, however, in conducting a business in a foreign state corporation be categorised into the following effectiveness of the judiciary rule of law risk of thrust repudiation corruption, and risk of expropriation.1 It is best to conduct business in a country that has a stable political condition and is known as business friendly. Although there is always risk, political risks of countries va ry in degrees. Political risk is defined as risk of loss when investing in a given up country caused by changes in a countrys political structure or policies much(prenominal) as tax laws, tariffs, expropriation of assets or restriction in repatriation of assets.2 Relevant to this discussion is the suit of RosInvestCo UK Ltd v Russian Federation3 where a UK corporation has brought arbitration proceedings against the Russian Federation for invalid expropriation, which is contrary to the UK-Russian BIT. This case is thoroughly discussed on the UK-Russian BIT paragraph. In weighing the political stability of a country, its history might provide a good indicator of such a risk as countries with a history of stability and consistency are more likely to be less risky than those with opposing history.4 Unfortunately, Russia does not have a history of stability and consistency considering the number of political disarray it had in the past. The Best Form of Corporate Entity to Take There are, at least, four ways by which the Ultra-Educators Software Limited may engage in the business of covering chocolates in Russia. One is by selling instantly by establishing its own section or subsidiary two, through retailers three, through an intermediary or distributor, and four, through a representative or agent company.5 apiece of these methods has its own advantages and disadvantages. In making decisions about this matter, the following must be considered the financial strength of Ultra-Educators its connections extent of its business commitments, and the present state of its personnel, equipment, and status.6 If the Company intends to sell directly, it must set up an entity in Russia that will directly take charge of the business of selling the chocolates that the Company will be exporting to that country. It can either set up a branch or a subsidiary. A branch is a part or division of a company whilst a subsidiary is a separate entity independent from the company. Thu s, the liability of a branch is that also of the main company, but not that of the subsidiary because it is deemed separate from the company.7 Moreover, if the branch has taxes owing to it by virtue of the business it is conducting in the foreign state, the main company is liable for such taxes. This is not so in the case of the subsidiary.8