Legal Differences

Governments around the world maintain laws that regulate business practices. In some countries, these laws are more controlling, and in others, the business climate is less regulated and structured. Some laws and regulations are designed to create a stable environment for business (both domestic and international) by establishing and enforcing property rights and contracts. Others are designed to protect consumers and the environment, requiring businesses to adhere to responsible, safe, and ethical practices. Still other laws and regulations favor domestic businesses and protect them from foreign competition. And, of course, some laws and regulations deal with taxation and other costs of conducting business.

Businesses must understand and follow the legal and regulatory requirements of the countries and regions in which they operate. The following is a list of common regulatory areas that affect businesses globally:

• Contract law governing agreements about the supply and delivery of goods and services
• Intellectual property registration and enforcement for brand names, logos, tag lines, inventions, and other unique creative works
• Labeling requirements for consumer safety, protection, and transparency
• Decency, censorship, and freedom-of-expression laws which apply to marketing communications
• Price floors, ceilings, and other regulations regarding the prices organizations can charge for certain types of goods and services
• Product safety, testing, and quality-control requirements
• Environmental protection laws that govern acceptable and responsible business practices
• Privacy laws governing data collection, storage, use, and permissions associated with consumers and their digital identities and information
• Financial reporting and disclosure laws to ensure that organizations provide transparency and operate with sound financial practices

In some cases, international laws and regulations designed to simplify these issues among regional allies and economic partners may also apply. For example, the European Union has regulations about food labeling that apply to food and beverages that are sold in any of the member countries of the EU.^[1]