With good advice and on-going guidance, carrying out business in a foreign country can be a relatively trouble-free experience, however, it can also be fraught with problems if done incorrectly.
Professional advice will furnish you with certain information, however, always try to ask yourself if you really understand it and what may lie behind these facts.
I accept this is easier said than done for someone with little experience, and inevitably there will be elements completely outside your sphere of understanding, but the more aware you are, the better placed you are to foresee and avert problems. I have repeatedly seen people get into trouble over seemingly obvious issues that in certain situations can get easily overlooked, especially if taken at face value.
What are you really agreeing to?
The reality of dealing in foreign countries means that you won’t understand everything (or sometimes anything!) that is going on in real time. With the thermometer topping 38 degrees (even hotter in the Notary office) and after a 2-hour wait it’s suddenly your turn and you will be handed a flurry of documents from all directions and expected to summarily sign each one in order to progress to the next office before it closes for lunch (and it’s on the other side of town!) There is little you can do to prepare for this experience but always have a good interpreter who has experience and regular involvement in these processes and don’t be afraid to ask questions; in these situations there really is no such thing as a stupid question.
Exactly what are you conceding?
It is common practice to give Power of Attorney to a lawyer or accountant to act on your behalf when you are not present, however, always create a very specific document allowing only the required actions. It may be more costly this way but at least you retain some control. Never concede a wide-ranging Power of Attorney unless you absolutely have to, and even then, only to someone who would give you a kidney. There can sometimes be a rather relaxed attitude by some professionals towards you handing over your legal rights to them, but that doesn’t mean you should also treat it so lightly.
The rules for companies can be different, for example in Italy and Montenegro amongst others, a legal representative of a company has the power to do virtually anything without seeking prior approval, so make sure you know exactly what authority you are assigning.
Who really owns this property you are buying?
Make absolutely certain that the person or company you are buying from has the legal right to transfer it. On the surface all might seem fine but I have seen some large-scale villa and apartment developments with a very complex and tenuous relationship between the marketing & sales company (with whom the contracts were signed and deposits paid) and the actual owner of the land & property. Get a lawyer to check the land registry and do some due diligence on the company. Don’t take anything for granted, a fancy sales office and impressive computer generated imagery don’t mean a thing!
If for some reason you are not able to be the registered owner of the property, even temporarily, be very wary of who you empower to hold the asset in escrow. I have seen many people do this in countries or regions where foreigners are not permitted to own property, some resulting in situations where the agent (in some cases a lawyer) demands an absurd sum when you decide to sell. Not all agents are bound by high legal standards, so check if they are licenced by a government authority and what protection, if any, you have.
You are only as good as the people you hire
Never underestimate that in situations of unfamiliar language and law, you are completely beholden to the skill and integrity of the person advising you, so you must involve yourself with good professionals who are experts in their local jurisdiction, will take ownership of the whole process and always advise in your best interest.
Keep records and expectations realistic
In all your dealings try to confirm all agreements and communications on email, I am acutely aware that in some countries this is most certainly not the modus operandi, as deals are done face to face or over the telephone, so don’t expect circulated minutes after each meeting, but at least try to keep a record of the essentials. It is not just useful in the event of potential dispute, but it will also create a better working relationship as it reduces misunderstandings, as the truth is that most people won’t recall exactly what might have been said or agreed 18 months prior.
Finally, regardless of what notional advice you might receive from a hungry-for-work lawyer, there is only so much help the law can afford you, for example there is no merit in winning a case against a company or individual with no money, or where the cost and effort of pursuing a case outweighs the return. Therefore you always have to exercise some discretion with whom you do business, carry out due diligence and ultimately be realistic about your potential risk exposure.Share