5 Legal Tips to Starting an International E-Commerce Business
Rosalyn Gladwin, of Gladwin Legal the go-to law firm for retailers, discusses the important points to note when looking to expand internationally
Every business has its own set of challenges and we know what a rollercoaster it can feel like. Nonetheless, if 2020 is to be used as an example, the future of business is definitely e-commerce.
If you have had a recent lightbulb moment to start an international e-commerce business, you are probably wondering, what’s next?
There is so much information for you to sift through when starting a business, especially when you expect it to operate on a global scale. We can help you organise some of the legal requirements you need to check off before launching.
Here are our 5 top tips that we would love all our clients to know!
1. Intellectual Property
When starting a business, one of the first things you will need to do is give your business a name and set up its domain name.
These early-stage steps will have a flow-on effect for the rest of your business's lifecycle because your name and branding not only need to be catchy and recognisable, but must also be able to form part of your intellectual property.
Your first priority should be registering your trademark in the country/countries where you are intending to sell your products.
When registering your proposed trademark, it should be distinctive from other trademarks in respect of similar goods and services in your trading country. The more distinctive your name and logo are, the more likely the relevant trademark office will accept the registration.
In Australia, the relevant trademark authority is IP Australia and its database will allow you to conduct a search to determine whether businesses are operating under the same name that you are proposing to use. You should also conduct these investigations using other online searches, ASIC and foreign databases depending on where you intend to trade. In some countries these searches are relatively easy and in others you will need to use a local agent (lawyer).
Importantly, you should also register your mark in the country where you are manufacturing your products – before disclosing your items!
Having your brand registered gives you a legal avenue to pursue in the event that a third party attempts to copy or infringe your mark or logo.
2. Watch out for privacy obligations
We know that businesses are gathering more data now than ever before and often through their websites. This can range from names, addresses, and phone numbers to payment information. You may be using this data, not only to market to existing customers, but to predict future customers and future shopping habits.
3. Ensure you have a terms and conditions
Website terms and conditions are the rules for individuals intending to access and use your website. These website terms and conditions act as a binding contractual agreement to help mitigate and manage your risk and liability. This is particularly important when considering businesses are usually unable to control who can access their website and how the information on their site may be used or interpreted. Some clients forget that when they use a templated storefront such as Shopify the terms and conditions may not be consistent with their goods or the way they want to operate their business.
4. Tax obligations
You will need to determine how the payment of taxes will work for your online business. That is, if your business will operate through an online platform such as Shopify or Amazon, ensure you are aware of who is responsible collection and payment of the taxes for the products you are selling.
Each country in which you trade will have its own tax legislation and requirements.
You will need to ensure that you are aware of the specific requirements for each of your trading countries so that you do not inadvertently breach the local laws.
5. Do your research
If you intending to start your e-commerce shop via an online platform or marketplace, these will likely be regulated by its own agreements and policies. Therefore, it is important that potential businesses familiarise themselves with all applicable policies and seller agreements, including when and how they are likely change.
It is also important that you research the laws of each country to intend to sell your products to. Depending on what goods or services you are intending to sell there may be additional obligations that must be complied with, with hefty penalties for non-compliance.