How to Succeed When Doing Business in or with an Emerging Market Country
Have you ever stumbled on a piece of your past work and found it surprisingly relevant today? That’s exactly what happened to me recently. While decluttering old files, I unearthed a PowerPoint from a talk I gave about a decade ago in Atlanta, focusing on the legal essentials for thriving in emerging market countries.
I was one of five panelists in my group, and the only lawyer. Before we sat down for questions, we were each given two minutes to talk about what we saw as necessary for succeeding in an emerging market country. I chose to focus on what it takes — legally — to conduct business successfully in or with emerging market countries.
The below is from my one slide PowerPoint, expanded just a tiny bit for this post:
1. Make the Law Your Friend
If you operate both legally and with an eye towards the legal ramifications of what you do, you will have greater leverage with both the companies you do business and the governments that regulate you. You will also sleep better at night, both in the short term and the long term.
Why It Matters: Operating within legal boundaries and understanding the implications of your actions gives you leverage in dealings with business partners and regulatory bodies.
Real-World Impact: Imagine navigating a complex network of international regulations with confidence, knowing you’re making informed decisions that safeguard your business’s future. This not only minimizes your legal risks, it also establishes your reputation as a trustworthy partner.
2. Use Good Contracts
If you have a great contract, you probably have at least some leverage to require your counterparty to remedy the problem or to sue if they don’t. If you have no contract, you almost certainly lack the leverage to get your counterparty to fix things.
The Leverage of Legality: A robust contract is your safety net. It gives you the power to enforce agreements and hold parties accountable.
A Cautionary Tale: Without a solid contract, you’re like a sailor without a life jacket in stormy seas. I’ve seen businesses flounder because they underestimated this, ending up in protracted and costly disputes with little to no chance of prevailing
3. Protect your Intellectual Property (IP)
Companies too often focus extensively on being protected on their deals, but in my experience, it is the rare deal that literally destroys a company. What we do see destroy companies is when someone takes their IP (and due to their failure to protect it) the company that has taken the IP can legally use it. When someone can sell YOUR exact product for 50% less than you, it becomes difficult, sometimes impossible, to compete.
Beyond Deals and Negotiations: Though securing favorable deals is obviously important, neglecting IP protection can be fatal. In my experience, losing IP is the leading cause of business failure in a foreign country.
A Stark Reality: Imagine watching a competitor legally replicate and sell your product at half the price you charge. This can and does put companies out of business.
What two minutes of advice would you give?