Features of International Business

Features of International Business

The following are the features of international business

a. Involvement of Countries.

International business can take place only when transactions occur across different countries

b. Use of Foreign Exchange.

Where countries trade with one another, it has to exchange the goods and services on the basis of foreign currency.

c. Legal Obligations.

Foreign trade is to  be  conducted  strictly in accordance with the export and import policyofthecountryconcerned. Theconsent of the government is to be mandatorily obtained with reference to export and import of certain goods and services. Thus government intervention is direct in respect of international transactions.

d. Exposure to Risk.

International  business  imposes   huge risks on the parties thereto due to long distances, fluctuation of value of currency, obsolescence, sanctioned, war, etc.,

e. Heavy Documentation Work.

International business necessitates fulfillment of a lot of formalities. Parties  to international business  have  to  execute a number of documents in the matters of conducting International business.

f. Difference in Economic Environment.

The economic environment of countries involved in international business differs significantly in terms of legal framework, institutional set-up, monetary fiscal and commercial policy, resources availability, production techniques, etc.,