Companies in the United States and the United Kingdom are currently experiencing a time of great change. As with any adaptation, it is necessary to observe the current legal priorities so that proper measures can be taken during this societal shift. By understanding the business environments in these countries, one can begin to observe how current trends and industries are shaping the law in both regions.
With the increase in technological integration and outsourcing, the US and UK have made it a priority to create laws that are both globally competitive and fair for foreign businesses operating in their countries. The most recent trend in both regions has been the expansion of intellectual property protection. Both governments recognize the value of IP and thus have created worldwide enforcement mechanisms and barriers to infringement. These business laws are aimed towards large technology companies whose business relies on patents and copyrights, but they also direct greater protections towards small businesses with less capital to protect.
Current priority areas for businesses in the US:
America First Trade Policy:
The goal of the America First Trade Policy is to create an environment where US companies can expand their markets, thus stimulating the overall American economy. The current administration has proposed numerous changes to the trading system, specifically with regard to tariffs and international trade obligations. The proposed changes would require American companies to move production back into US-based facilities, which would reduce costs for the company and increase revenue for the US Treasury.
Changing Tax Requirements:
Due to the increased global integration of businesses, the US has taken a significant step towards reducing taxes through an overhaul of the tax code. The American Tax Reform Act (ATRA), which was passed in December 2017, contains provisions that significantly reduce tax rates for individuals, corporations and partnerships. ATRA will significantly reduce corporate income tax rates while eliminating several high-tax states and local communities. The goal of this tax reform bill is to increase competitiveness in the US and ultimately improve the economy.
In recent years, the US has made a shift away from coal, which is an energy source that has received significant criticism over recent years due to its harmful effects on the environment. Specifically, the US has shifted towards natural gas and renewable energies like wind and solar power. In fact, since 2006, natural gas-fired power generation has increased by 45 per cent while coal-fired power declined by 27 per cent. The government is urging companies to continue following this trend in order to reduce overall carbon emissions and thus protect the environment.
Due to the synergistic effects of globalization, reduced tax rates and increased employment within the country, companies have a strong incentive to accept immigrants into the country. Specifically, this is due to increased demand for highly skilled workers, thus increasing competition in the labour market. The goal of immigration legislation is to increase opportunities for all citizens while fulfilling labour shortages that businesses across the country need. Currently, over one million illegal immigrants are living in the US, and approximately 7 million legal immigrants are working in US industries.
Current priority areas for businesses in the UK:
As Great Britain became independent from the European Union, it decided to pursue free trade with some of its former allies. In fact, it is estimated that in 2019 the UK will have nearly double the trade with non-EU countries when compared to trade with EU countries. As such, competition within the UK market will be higher than ever, and businesses must be prepared for this shift. In addition to increased competition, the UK is going to have to harmonize its trade laws with other countries.
Currently, the UK government is pursuing a policy that would reduce red tape for businesses. Specifically, it is seeking to create a single business portal at Companies House, which will reduce the number of companies that have to deal with multiple agencies and local councils. This will enable businesses to focus on their core business instead of administrative issues.
Regulation and Compliance:
In order for businesses in the UK to compete globally, they must maintain high standards for compliance and regulation. Currently, there is a significant amount of regulation and red tape associated with business investments. However, the government is currently working on plans that will reduce the regulatory burden on businesses and make them more competitive within global markets.
Passing the burden of government to business:
The UK not only wants to lower the regulatory and compliance standards, but they also want to reduce the financial burden of the government on business. Specifically, they are considering a policy that would reduce taxes by reducing the number of high-salary staff and increasing productivity. This will have the dual benefit of improving competitiveness and reducing government expenses.
The pillar of business law is the law itself:
International business law refers to the proper application of law in each nation that a company does business. This means knowing whether or not laws and trade agreements exist that restrict trade, what procedures must be followed for conducting business, and whether or not a country is ripe for investment, among other things. This takes a keen knowledge of current international laws as well as knowing what legal actions should be taken in order to ensure the smooth operation of your international business enterprise.
While market integration and globalization continue to affect international business, the law is still not an abstract concept. The law itself must be understood. There are still countries in the world that do not have a working court system or appropriate laws in place to protect investors and employees. International business law is one of the most difficult elements of a company’s operation to learn how to handle, no matter how experienced you are with international deals. Do not forget that this is a rapidly changing field, and your understanding may be outdated in short order.
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