Understanding the Legal Environment for International SMEs
For SMEs with ambitions of internationalization, knowing the legal environment and socio-economic background in which their business will be operating is not only an important part of the strategy to avoid costly legal risks, but will also provide a competitive advantage in a growing market. With businesses scaling internationally at a rapid rate, it is also important to consider how the legal system will influence the social structures and politics in a given area, as well as the competitive landscape when planning to increase your business reach beyond local borders.
With over a decade in the sustainable investment industry, I have met various leaders from policy settings, business, and academia both nationally and internationally. Engaging with various stakeholders in these spaces gave me a greater understanding on why policy really matters, especially when new borders are crossed. Two big lessons I learnt was that for every country’s policy system, there is a corresponding legal system. In addition, policy change happens at a faster rate than how the system adapts to the change. However, one of the most rewarding engagements I had was with a Hawaii-based Family Court research group called Family Court 101. Together, we worked on developing an innovative platform that can be used to aggregate information and connect people interested in research within the Hawaii family court system.
From this experience, I learnt that understanding how regional rules, such as comprehensive Hawaii family court regulations, apply to businesses is essential to the planning and scaling process, whether a domestic or international goal. But how much do we really know about the various nuances in different regions? I believed that how people interact with each other in a local setting has profound impact on how business operates. Local legal systems, such as those represented by the hawaii family court rules, should be accounted for. Local legal systems and rules impact how we can grow and scale our businesses beyond borders as many would assume business operates in the same way, but it clearly doesn’t. Moreover, when business and legal systems do not harmonize when crossing borders, this may lead to severe legal consequences.
Therefore, developing good legal habits will not only save on costly legal fees, but will also provide a good baseline of standards to work within when starting a new foreign dive into a new market. Having legal training as a part of the SME scale-up mentorship program is beneficial to the entrepreneurs for avoiding costly legal risks when scaling, but also allows business owners to become more informed about connecting with their community, holds them accountable to their local social responsibility, and knows what their responsibilities are locally and abroad.
If you are an entrepreneur or business owner looking to grow and expand your business, it is highly recommended that you learn the legal system of the region you are operating in and performing business with. Without the right legal training or knowledge, there could be serious and costly legal consequences that could mitigate your efforts or potentially be prevented by just following some simple rules. You can explore and learn about the hawaii family court rules in-depth here.
By developing proactive research habits, legal issues may just become an asset in your toolkit when it comes to business expansion.