.webp)
Expanding internationally is crucial to sustaining growth for many businesses, and with e-commerce tools, flexible multi-currency banking and smart voice and text translation tools, it's never been more accessible. But the ease of getting started with cross-border trade can mask hidden complexities and significant cross-border legal risk.
The same contracts that have protected you in domestic business might not be enforceable in other countries. Disputes with suppliers or customers overseas can cause massive headaches as you figure out which country's courts have jurisdiction. And transferring data or payments across borders can leave you in breach of another country's laws or regulations.
In this article, Mark Montaldo draws on his experience helping businesses navigate cross-border legal issues to explain where the most common legal risks arise when trading internationally, and how to ensure your business is prepared and protected.
Growing exposure for businesses of every size
Cross-border legal issues are no longer restricted to large multinational companies with dedicated legal teams. E-commerce, remote workforces, international supply chains, and digital service delivery mean that businesses of all sizes – from startups to SMEs and beyond – routinely operate across borders. But in many cases, they may not fully appreciate the legal risks they're exposing themselves to. For example:
- A UK-based SaaS company selling to customers in the EU, US, and Asia-Pacific must be aware of GDPR, state-level US privacy laws, and various country-specific data protection laws.
- A manufacturing business that imports components and exports finished goods worldwide must consider export controls and potential sanctions exposure for every shipment.
- A professional services firm that uses contractors in five countries has to navigate employment law, tax obligations, and IP ownership rules that can vary widely.
What we see is that too often, businesses have international legal exposure but not international legal infrastructure. They may use a domestic solicitor for UK matters and plan to engage a local lawyer when needed for a specific issue. But this means they lack a coordinated strategy and a single point of accountability – and that's how legal risk creeps in.
Where does cross-border legal risk have the most impact?
The legal risks involved in trading internationally aren't confined to a single category – they're present in every aspect of your business. From drafting a sales contract to hiring a local employee or contractor, you need to be aware of the different norms, regulations and laws in the jurisdictions where you operate, and ensure that your business processes are compliant.
Contracts
A contract which states it is governed by English law might seem watertight. But if you need to enforce it against a company or individual in a jurisdiction that doesn't recognise English judgments, you may struggle. Dispute resolution clauses that specify the English courts are of little use if the other party has no presence or assets in the UK. Contracts have to be drafted with specific jurisdictions in mind if they are to hold weight.
Performance
Sanctions regimes and export controls are subject to frequent changes and apply to technology, software, and technical data as well as physical goods. Data protection rules governing how you store and transfer information between entities can be extremely complex when two or more jurisdictions are involved. Employment laws vary in terms of hiring, classification, benefits and termination. Constant oversight is therefore necessary to ensure your business remains compliant as regulations and legislation evolve.
Disputes
If you're trading internationally, you have to take a realistic view that a dispute will eventually happen: the key difference in the outcome is how well prepared you are. You need to know the critical facts ahead of time:
- How you can serve proceedings abroad
- Whether judgments obtained in one jurisdiction can be enforced in another
- What injunctions or freezing orders are available in the countries where you operate
If you don't consider the worst-case scenarios at the start of a business relationship, you leave yourself exposed.
Enforcement
Winning a judgment or award is only the start; you also need to be able to enforce it. If you obtain a court order to enforce payment of a debt, but only then discover that the debtor is holding all of their assets in a non-cooperative jurisdiction, then you're unlikely to recover the funds. Planning ahead is crucial. Mapping assets, understanding local laws and reviewing available dispute resolution methods before entering into a contract helps avoid nasty surprises further down the line.
The coordination problem: where gaps emerge, risk increases
Even businesses that recognise these issues can struggle with the coordination required to manage them effectively. The typical approach, instructing a UK solicitor for domestic matters and finding local lawyers on an ad hoc basis for overseas issues, can leave gaps and introduce risk.
The knowledge gap
The solicitor you've worked with for years in the UK may be experienced in English law but unable to advise how a particular contract would be enforceable in your target markets. If you hire a local lawyer, they may have a better understanding of jurisdiction-specific issues, but a limited understanding of your broader commercial strategy or other legal exposure.
The accountability gap
Across jurisdictions, issues that fall between two firms (or that require coordination between them) can easily slip through. Neither firm may feel it's their responsibility to proactively identify the interaction between a contract governed by English law and a regulatory requirement in the country of performance. That means it's down to you, as the client, to check that every issue is being addressed, which is far from ideal.
The communication gap
Legal advice delivered in the style and terminology of an unfamiliar jurisdiction can be difficult to act on, as concepts that don't translate neatly between legal systems can be misunderstood. And managing multiple advisory relationships across time zones, languages, and professional cultures requires significant internal resources, drawing focus away from your core business activities.
Controlling costs – why a proactive approach matters
If you wait until a legal issue rears its head before instructing a legal team, you're always going to spend more than you need to. Finding the right overseas counsel for a particular issue, agreeing terms, checking for conflicts and explaining the context all take valuable time and add to your costs. And when the next problem crops up, in the next jurisdiction, you have to repeat the same process.
That's where Complex 360 comes in. One UK-based team that understands your business, manages the relationship with vetted local counsel, translates advice into practical, plain-English guidance, and takes accountability for the overall legal strategy.
Frequently asked questions
We're a UK company selling to EU customers through our website. Do we still need cross-border legal advice?
Often, yes. Even e-commerce businesses that sell directly to customers in the EU are subject to cross-border legal obligations. Examples include compliance with consumer protection laws in your target countries, your obligations as a data controller under the GDPR, and differing VAT registration requirements depending on the volume of sales in a specific country. If you're concerned you may be exposed to hidden legal risks, we can conduct a brief initial review to assess your level of exposure and identify where you need to take action.
We already have a relationship with an in-country law firm. Can Complex 360 still help?
Yes. Joining Complex 360 doesn't mean replacing your existing relationships, especially if they're working well. Where we do add value is in coordinating your work with local counsel. We'll ensure they receive clear communication and well-defined instructions, and that they understand the full context of any dispute. And if you don't have local representation in a particular country, we can make introductions from our vetted network of partner firms worldwide.
How quickly can you take action if a dispute arises unexpectedly?
Where a dispute arises that requires swift action – whether that's interim relief, evidence preservation, or applications for court orders – we can work quickly with local counsel in the relevant country to set the wheels in motion. For Complex 360 members, we already have your business context and key documents on file, which significantly accelerates the initial response. If you're not yet a member but you're facing an urgent matter, contact us. We can take immediate instructions and discuss ongoing support arrangements in parallel.
Can you help with international employment issues?
Yes. It's an area of law that we specialise in – and one of the most commonly requested, as UK businesses increase their overseas headcount, either through traditional employment models or by using freelancers or contractors. Whatever your business model: local entity, joint venture, or contractor network, we can advise on the UK legal issues directly and coordinate with local employment counsel for jurisdiction-specific guidance on redundancy, termination, contracts, pay and more.
.svg)
