Before you learn to play a new game, you probably ask some questions. What are the rules? What is the objective of the game? How do you win? What are the best strategies? How do you avoid being thrown out of the game?

Business is like a game. Every business person who embarks on a new business deal needs to ask questions to get the information they need to make the right decisions. Some of the questions will be about business and financial issues, and others will be about the rules. You need to understand the rules, and how to play within them. You also need to understand the key risks, and the solutions to mitigate those risks.

In this chapter, we begin with an introduction of seven key legal areas where rules affect your offshore business. Next, the discussion moves on to deal structures, risks and risk mitigation through contract provisions. This chapter focuses on “what” you should be concerned about, not necessarily “how” you can address it. “How” you play the game and play within the rules is beyond our scope.

Key legal considerations in offshoring

Seven of the key offshore legal issues are as follows: intellectual property (IP) protection; labor and employment rights; export control restrictions; privacy and data transfer restrictions; government approval of offshoring; taxes; and currency conversion exposure.

IP protection

The laws protecting IP rights vary from country to country. They are like a patchwork quilt, with holes.