Working with a client in Switzerland?
December 7, 2005 11:09 AM Subscribe
Thinking about doing business overseas. Caveats?
The small graphic design firm I work for recently started advertising via Google Adwords. We got a bite from a client based in London, who, on reviewing our portfolio, referred us to a branch of the company based somewhere in Switzerland. My boss recently spoke to representatives there over the phone, and the deal draws closer to completion.
I have some concerns regarding doing business overseas. First off, although I know the company exists, how do I know these people are even legit representatives of it? Further, if this isn't legit, how do we handle the transfer of payment to prevent fraud? Finally, what recourse, if any, do we have if they just decide not to pay?
The small graphic design firm I work for recently started advertising via Google Adwords. We got a bite from a client based in London, who, on reviewing our portfolio, referred us to a branch of the company based somewhere in Switzerland. My boss recently spoke to representatives there over the phone, and the deal draws closer to completion.
I have some concerns regarding doing business overseas. First off, although I know the company exists, how do I know these people are even legit representatives of it? Further, if this isn't legit, how do we handle the transfer of payment to prevent fraud? Finally, what recourse, if any, do we have if they just decide not to pay?
Contracts apply internationally the same as they apply in the US, and there is a certain amount of faith in any business transaction. Just as you would for any business transaction, make sure you're setting up the deal such that expectations on both sides are well understood and that if something drastic were to happen, the impact on your company is minimized.
posted by mikel at 11:30 AM on December 7, 2005
posted by mikel at 11:30 AM on December 7, 2005
how do we handle the transfer of payment to prevent fraud?
If you're really worried about them doing a reverse transfer out of an account [I'm not sure how easy that would be to do, but still ... ], set up a new one just for them, with just a few dollars in it.
posted by WestCoaster at 12:56 PM on December 7, 2005
If you're really worried about them doing a reverse transfer out of an account [I'm not sure how easy that would be to do, but still ... ], set up a new one just for them, with just a few dollars in it.
posted by WestCoaster at 12:56 PM on December 7, 2005
Contracts apply internationally the same as they apply in the US
This is a bit misleading. The concept of a breach of contract varies totally from jurisdiction to jurisdiction as will the remedies that go with it. Any contract you sign should have a clause stating the law and courts that governs it. The choice between Swiss and US (I presume you're in the US) law is extremely important as it will affect what happens if things go wrong and how intellectual property rights are handled etc. It's also much easier for you if you can sue in a US court rather than have to start proceedings in Switzerland.
That said, the amount of verification to do really depends on the value of the job. If you think it'll be a one off, then checking trade organisations, conferences (have they been attendees/ sponsors), might be enough for you.
The kind of things that lawyers look for in commercial transactions to check that the companies involved are legit are the incorporation documents. In Switzerland I think this would be an extract from the Swiss commercial register and the deed of incorporation which would ideally be notarised. The proof of the representative's authority could be a notarised extract from the current register of directors or power of attorney (it depends on how big the swiss branch is). Copies of accounts would be useful to show how business is going for them.
It's possible that they are asking a similar question on "Bitten Sie MetaFilter" right now. It's worth thinking about how you would prove to them that you are legit. Ultimately, as mikel says, a certain level of trust is vital or you shouldn't be doing business with them.
If this is worth a lot of money or becomes a substantial part of your business you should speak to a lawyer to get standard documents drawn up. The lawyers, or a major bank, should be able to provide or recommend an escrow agent if you're worried about payment.
posted by patricio at 1:54 PM on December 7, 2005
This is a bit misleading. The concept of a breach of contract varies totally from jurisdiction to jurisdiction as will the remedies that go with it. Any contract you sign should have a clause stating the law and courts that governs it. The choice between Swiss and US (I presume you're in the US) law is extremely important as it will affect what happens if things go wrong and how intellectual property rights are handled etc. It's also much easier for you if you can sue in a US court rather than have to start proceedings in Switzerland.
That said, the amount of verification to do really depends on the value of the job. If you think it'll be a one off, then checking trade organisations, conferences (have they been attendees/ sponsors), might be enough for you.
The kind of things that lawyers look for in commercial transactions to check that the companies involved are legit are the incorporation documents. In Switzerland I think this would be an extract from the Swiss commercial register and the deed of incorporation which would ideally be notarised. The proof of the representative's authority could be a notarised extract from the current register of directors or power of attorney (it depends on how big the swiss branch is). Copies of accounts would be useful to show how business is going for them.
It's possible that they are asking a similar question on "Bitten Sie MetaFilter" right now. It's worth thinking about how you would prove to them that you are legit. Ultimately, as mikel says, a certain level of trust is vital or you shouldn't be doing business with them.
If this is worth a lot of money or becomes a substantial part of your business you should speak to a lawyer to get standard documents drawn up. The lawyers, or a major bank, should be able to provide or recommend an escrow agent if you're worried about payment.
posted by patricio at 1:54 PM on December 7, 2005
When I deal internationally for larger purchases ($500 or more) I always pay by Bank Wire Transfer, more (or less) commonly known as Telegraphic Transfer, or TT.
It guarantees the receiver will get your money. Unfortunately it leaves the payer with absolutely ZERO guarantees of getting anything in return (it's like handing the other person cash and hoping they keep their end of the bargain). But it is pretty standard, at least for purchasing product.
You'll be paying in their currency. For smaller amounts (probably those under $5000) you'll pay the bank's rate. Otherwise, they'll phone up the bank's currency brokers and work out a better deal for you (I've saved something like $2,000 on a very large transfer this way once).
posted by shepd at 3:12 PM on December 7, 2005
It guarantees the receiver will get your money. Unfortunately it leaves the payer with absolutely ZERO guarantees of getting anything in return (it's like handing the other person cash and hoping they keep their end of the bargain). But it is pretty standard, at least for purchasing product.
You'll be paying in their currency. For smaller amounts (probably those under $5000) you'll pay the bank's rate. Otherwise, they'll phone up the bank's currency brokers and work out a better deal for you (I've saved something like $2,000 on a very large transfer this way once).
posted by shepd at 3:12 PM on December 7, 2005
You can use the Swiss commercial register to check if the company and representatives are legit. They have to be listed in there including what is required (how many signatures) to sign a contract. Being Swiss, I would no be worried too much. We often do business with US or Canadian Companies and we only had good expiriences. The way business is done is very similar. You should try to create a relationship based on mutual trust. Be friendly and honest. Take into account that English is a foreign language for most Swiss (althoug most speak very well). Make short sentences and clear statements in conversations and don't use Amercian expressions they might not understand. If they don't pay, the procedure is rather simple - but I don't think this is going to be necessary.
posted by m.openmind at 4:26 AM on December 8, 2005
posted by m.openmind at 4:26 AM on December 8, 2005
This thread is closed to new comments.
As far as payment, I would propose a half up front, half on completion (or thirds) scheme to allay your fears. And don't start work until you've received the first payment. This is really a standard business arrangement and if it is made an issue by your potential client, I might consider that a red flag.
Just finished a freelance project for a new client in the Netherlands and all went perfectly.
posted by garbo at 11:24 AM on December 7, 2005