Trading internationally opens up huge opportunities, but doing business with a company in another country adds layers of legal, practical and financial risk you would not face at home. A bit of planning protects you. Here is a plain-English checklist for businesses in England and Wales.
1. Due diligence on the other party
Before committing, check who you are dealing with:
- Does the company actually exist, and who controls it? Use the foreign equivalent of Companies House where available.
- Is it financially sound and creditworthy?
- Does it have the licences/authorisations it needs in its country?
- Any red flags, litigation, insolvency, adverse media?
Distance makes verification harder, so invest in proper checks (and consider local advisers).
2. Governing law and jurisdiction
Cross-border contracts must be clear about which country's law applies (governing law) and where disputes are decided (jurisdiction). Don't leave this to chance:
- Specify English law (or another chosen law) as the governing law.
- Choose a dispute-resolution forum, the courts of a named country, or arbitration.
- Remember enforcement: a court judgment may be hard to enforce abroad, whereas arbitration awards are widely enforceable under the New York Convention, often the safer choice for international deals.
3. The contract itself
- Use a written contract in a language both understand, with agreed Incoterms® for goods (allocating cost, risk and delivery responsibilities).
- Address payment (currency, timing, and security such as a letter of credit), delivery, IP, confidentiality, liability and termination.
- Consider currency/exchange-rate risk and how it is shared.
4. Getting paid and managing financial risk
International non-payment is hard to chase. Reduce the risk with:
- advance payment, deposits or staged payments;
- a letter of credit (bank-guaranteed payment on presenting documents);
- trade credit insurance; and
- clear retention of title for goods.
5. Sanctions, export controls and compliance
This is critical and often overlooked:
- Sanctions, you must not deal with sanctioned countries, entities or individuals; check the UK sanctions lists before contracting.
- Export controls / licences, some goods, software and technology (especially dual-use or military) need an export licence.
- Anti-bribery, the Bribery Act 2010 applies to UK businesses' conduct abroad, including a corporate offence of failing to prevent bribery; have adequate procedures.
- Anti-money laundering checks may apply.
6. National security on inward investment
The National Security and Investment Act 2021 (NSIA) can apply to UK or foreign investors alike. Mandatory notification is required for certain acquisitions of qualifying entities (not assets) in specified sensitive sectors. Completing a notifiable acquisition without approval can make it void and expose parties to civil and criminal penalties. Asset acquisitions are not mandatorily notifiable but may be called in for review, with different remedies if a national security risk is found.
7. Tax, customs and data
- Consider VAT, customs duties and EORI requirements for cross-border goods.
- Watch double-taxation and withholding tax issues, take tax advice.
- If personal data moves across borders, ensure a lawful international transfer mechanism under the UK GDPR.
Key takeaways
- Do thorough due diligence on the foreign party, existence, ownership, financial health and licences.
- Nail down governing law, jurisdiction and dispute resolution, favour arbitration for easier cross-border enforcement.
- Manage payment risk (letters of credit, advance payment, credit insurance) and use clear contracts with Incoterms®.
- Comply with sanctions, export controls and the Bribery Act 2010, watch the NSIA 2021 for inward investment, and address tax, customs and data-transfer rules.
Sources
- UK sanctions regime and export-control licensing; Bribery Act 2010 (including failure to prevent bribery)
- National Security and Investment Act 2021 (mandatory notification for sensitive acquisitions)
- New York Convention (enforcement of arbitral awards); Incoterms®; UK GDPR (international data transfers); HMRC customs/VAT rules
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.