International Business Transactions

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International
Business
Transactions
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Why does a business expand abroad?
 To increase turnover and profit

 Create new markets
 Strengthen business reputation
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What is international business law?
 The governing law in international business transactions.

 International business law should consider the harmonization of
different understanding of international business transactions.
 Appreciate differences and use to compete successfully in the
international market.
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Forms of internationals business
transactions
 Directs sales- simplest way of doing international business
( importation or exportation) , in order to understand foreign
market, business can decide to use intermediaries. There are
two types of international intermediaries it can be through
agency and distribution.
 License its IPRs- a business may decide to produce its products
abroad instead of producing it in its home country the exporting
to foreign countries. Foreign businesses allow to produce and
sells its products.
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IPRs effective business activities
 Licensing of objects of industrial property rights. ( patents or

trademark)
 Licensing of copyright
 Technology transfer
 Franchising
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Example of transfer of IPRS
 Pharmaceutical company may license its patent on specific drug

to a Filipino company to produce and sells it in the Philippines.
 Copyright- a foreign company may license the copyright of a film
to a Filipino company for duplication and sale of the film in
Philippine market.
 International Franchising- like KFC, Mcdonalds and Pizzza Hut
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Foreign Direct Investment
 Branch
 Subsidiary
 Joint venture
 Setting up a 100 percent foreign-owned enterprise
 Merger and acquisition
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Domestic Corporations (subsidiary)
 A registered company with at least 60% Filipino ownership is

considered as having Philippine nationality.
 if more than 40% foreign-owned, it is considered a foreign
owned domestic corporation.
 More than 40% and up to 100% foreign ownership of a
Domestic Market Enterprise is allowed as long as the paid-in
capital is a minimum of USD 200,000.00. Employing a minimum
of 50 direct employees or using advanced technology may allow
a paid-in capital of less than USD 100,000.00 (R.A. 7042 as
amended by R.A. 8179).
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Related international transactions
 International logistic
 Lending
 Leasing
 Employment
 Foreign portfolio investment
 International banking
 International financial transaction ( international taxation,
international insurance).
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Players in international business
 Traders- the main subject in international business, both

individual and businesses. Trader is an economic organizations
which is legally established or Traders can be an individual who
trade independently and regularly and get business registration
certificate.
 International organizations
 States
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Jurisdictional immunity in international law
 Act of State Doctrine- the doctrine states that, a nations is

sovereign within its own borders and its domestic actions may
not be questioned in the courts of another nation.
 sovereign states is bound to respect.
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Application of “Act of State Doctrine”
Banco Nacional de Cuba vs. Sabbatino ( 1964)

The case arose when cuba nationalized its sugar industry, taking
control of sugar refineries and other companies in the wake of the
Cuban revolution. A large number of Americans who had invested
in those companies lost their investment without compensation
when the Cuban government assumed control. Despite the losses
suffered by the US national investor, the SC upheld the “ Act of
State Doctrine by assuming the validity of Cuba’s domestic actions
and therefore rejected claim of US nationals against Cuba for their
lost of investment.
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Foreign state immunity
 Affects fair competition in international trade and international

transactions
 Under international law states are not immune from jurisdiction
of foreign courts insofar as their commercial activities are
concerned.
 Commercial property may be levied upon for the satisfaction of
judgement rendered against them in connection with their
commercial activities.
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Made in the world
 Companies divide their operations across the world from

designing of their product and manufacturing of components to
assembly and marketing, creating international production
chains.
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Global Citizens
You wake up in the morning you may brew coffee in a pot from
China, shave with razor made in Taiwan, eat butter shipped from
new Zealand and drive a car made from Japan.
Your reach and enter your office to video conference with your boss
who is at Russia on business trip.
You email friend and associates, post at facebook around the world
and make a call of travel reservation through call center routed to
the Philippines.
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-END-

International Business Transactions

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 To increase turnover and profit

 The governing law in international business transactions.

 Licensing of objects of industrial property rights. ( patents or

 Pharmaceutical company may license its patent on specific drug

 A registered company with at least 60% Filipino ownership is

 Traders- the main subject in international business, both

 Act of State Doctrine- the doctrine states that, a nations is

Banco Nacional de Cuba vs. Sabbatino ( 1964)

 Affects fair competition in international trade and international

 Companies divide their operations across the world from

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