Have you heard the story about the ex-pat driving home along a European country road who hit a telephone pole? How about the part of the story where the power was knocked out to the adjacent farm disrupting the sleep of the farmer’s cows and resulting in the farmer threatening to sue the ex-pat for the cow’s sleep deprivation?
And then there was the ex-pat assigned to a Central American country who discovered (just before fleeing out the bedroom window) that his paramour was the wife of the local police chief.
Spanning the globe to Asia, we find a regional judge in need of cash who issued a warrant for the arrest of an ex-pat.
There are a number of factors to consider when selecting the site for a foreign office not least of which is researching the level of corruption. When a company does take into consideration corruption risk, it is usually from the perspective of impediments to obtain government contracts, product licenses, business visas, etc. The impact of corruption on the personal lives of ex-pats is not always assessed.
Corruption risk can be determined in several ways. The first step to take is to review Transparency International’s (TI) Corruption Perceptions Index (CPI). The CPI pulls from TI’s presence in 100 countries, experts from companies, universities and other NGOs to create tools applicable to a variety of circumstances across different levels within a jurisdiction. The 2015 CPI includes rankings of 168 jurisdictions.
An additional source of information is the U.S. Department of State Bureau of Consular Affairs’ alerts and warnings. This information provides, not just a short-term view of current travel conditions, but an indication of the longer term instability of a jurisdiction.
Peers, former colleagues and industry associations can also shed light on real life legal obstacles faced by ex-pats in a particular jurisdiction.
It is critical to engage the services of a trusted local law firm prior to finalizing the choice of jurisdiction. Local counsel will advise on laws that may directly impact the personal legal risk to an employee in her role as managing director of a subsidiary, country manager, driver of an automobile, apartment tenant, socialite, etc. Reliable counsel will also provide insight regarding the reliability of fair-handed treatment by the criminal justice and judiciary systems.
The above anecdotes are all true. In each situation, the company protected the employee but not without cost to the business. The employee who disturbed the cow was promptly repatriated and the company paid the farmer a settlement to avoid the company losing any work visas. The passionate manager was hurriedly whisked away on a company plane. The regional manager was moved from hotel to hotel around the country until an order was obtained from a higher court nullifying the arrest warrant.
The jurisdiction assessment process can be time consuming and without the appropriate staff can be overwhelming. If you would like assistance with navigating the legal risks associated with establishing an office in a new jurisdiction, including establishing local counsel relationships, please contact me at email@example.com