How can I protect my capital investment into an international business?
December 2, 2010 8:16 AM Subscribe
How do I protect myself (my investment) when starting an international business?
I'm going to be starting an export business with a friend of mine outside my home country. Basically if we can find the product we need for the right price, we're going to buy it and ship it to a buyer we already have lined up in Europe. This is my friends contact.
My friend here has years of experience in this business and I'm basically tagging along putting in 50% of the initial investment and learning as we go.
But I'm worried. I'm going to be putting up between $9000-$13000 for our first shipment. My friend will be doing the same. But there just seems like a good deal of ways my money could be stolen from me and I'd have really no recourse.
For our first purchase we've decided to forgo doing everything 100% legit, pay in cash as we watch a container being loaded with our product. So we will not have a legal business. This part doesn't worry me as much as not having any legal recourse. Though I really doubt we would get very far in the courts in the country we're in.
So it basically comes down to this. My money can be ripped off by:
-My friend, he could just take it if I have it in my hands and in cash.
-Whoever we're buying the product from.
-Someone else??
-Post purchase, my friend could run away with the profits.
How can I protect against this? Or have I already cut off my opportunities to protect against this based on our course of action? Even if we have a legit business, it just seems sketchy. The best case scenario would have me wiring money to the sellers account, but what would really stop the seller from running away with the money? This is the 3rd world. Is this just all part of the risk I've got to take here?
Basically. If you've been in a similar situation or have known someone who has how did you/they deal with the risks involved?
I'm going to be starting an export business with a friend of mine outside my home country. Basically if we can find the product we need for the right price, we're going to buy it and ship it to a buyer we already have lined up in Europe. This is my friends contact.
My friend here has years of experience in this business and I'm basically tagging along putting in 50% of the initial investment and learning as we go.
But I'm worried. I'm going to be putting up between $9000-$13000 for our first shipment. My friend will be doing the same. But there just seems like a good deal of ways my money could be stolen from me and I'd have really no recourse.
For our first purchase we've decided to forgo doing everything 100% legit, pay in cash as we watch a container being loaded with our product. So we will not have a legal business. This part doesn't worry me as much as not having any legal recourse. Though I really doubt we would get very far in the courts in the country we're in.
So it basically comes down to this. My money can be ripped off by:
-My friend, he could just take it if I have it in my hands and in cash.
-Whoever we're buying the product from.
-Someone else??
-Post purchase, my friend could run away with the profits.
How can I protect against this? Or have I already cut off my opportunities to protect against this based on our course of action? Even if we have a legit business, it just seems sketchy. The best case scenario would have me wiring money to the sellers account, but what would really stop the seller from running away with the money? This is the 3rd world. Is this just all part of the risk I've got to take here?
Basically. If you've been in a similar situation or have known someone who has how did you/they deal with the risks involved?
This post was deleted for the following reason: We'd prefer you didn't ask how to avoid getting ripped off for knowingly illegally shipping something. -- cortex
Response by poster: Please read the post in a fairer light and don't comment if you have nothing positive to add. Tell me to make a legal business and then tell me how to not get screwed. Thanks!
posted by bindasj at 8:30 AM on December 2, 2010
posted by bindasj at 8:30 AM on December 2, 2010
Still, might want to have the mods anonymize this post just in case.
posted by hermitosis at 8:39 AM on December 2, 2010
posted by hermitosis at 8:39 AM on December 2, 2010
re: Dealing with exchanging goods and money at different times. This is often done with an Escrow service but it strikes me as really difficult to use a reputable escrow service to manage the dealings of an illegal business.
posted by mmascolino at 8:39 AM on December 2, 2010
posted by mmascolino at 8:39 AM on December 2, 2010
Please read the post in a fairer light...
The problem is that when you openly admit to illegal activity, your ability for legal recourse drops through the floor. It's the equivalent of saying "my house was broken into and someone stole my drugs." You can't go through the legal system to correct this because doing so would be using said system to aid you in committing a crime. If you're doing this legitimately, you use an escrow, like mmascolino was saying, but you open yourself up to getting into legal trouble, by both the law and the escrow service if you attempt to use them to aid you in illegal activity.
posted by griphus at 8:47 AM on December 2, 2010 [1 favorite]
The problem is that when you openly admit to illegal activity, your ability for legal recourse drops through the floor. It's the equivalent of saying "my house was broken into and someone stole my drugs." You can't go through the legal system to correct this because doing so would be using said system to aid you in committing a crime. If you're doing this legitimately, you use an escrow, like mmascolino was saying, but you open yourself up to getting into legal trouble, by both the law and the escrow service if you attempt to use them to aid you in illegal activity.
posted by griphus at 8:47 AM on December 2, 2010 [1 favorite]
So we will not have a legal business. This part doesn't worry me as much as not having any legal recourse.
It may in fact mean that you have no legal recourse, depending on jurisdiction. Browse Fark.com for a few minutes and read all the old stories about what happens to people that call the cops to report that their drugs were stolen. Additionally, some jurisdictions will not enforce contracts that have an illegal aim as their purpose. You should seek the advice of a competent attorney in your jurisdiction (but be aware that legal ethics rules may prevent any attorney from giving you advice on how to "safely" conduct certain crimes).
posted by Inspector.Gadget at 9:02 AM on December 2, 2010
It may in fact mean that you have no legal recourse, depending on jurisdiction. Browse Fark.com for a few minutes and read all the old stories about what happens to people that call the cops to report that their drugs were stolen. Additionally, some jurisdictions will not enforce contracts that have an illegal aim as their purpose. You should seek the advice of a competent attorney in your jurisdiction (but be aware that legal ethics rules may prevent any attorney from giving you advice on how to "safely" conduct certain crimes).
posted by Inspector.Gadget at 9:02 AM on December 2, 2010
This thread is closed to new comments.
posted by 2bucksplus at 8:20 AM on December 2, 2010 [1 favorite]