Question

Business practices and customs vary throughout the world. What are some of the ethical issues concerning payments that must be made in a foreign country to obtain business opportunities?

Answer 1

There are certain ethical issues related to payments, which a business organisation faces when it obtains a business opportunity in a foreign country.

Tax Issues: The tax laws for the foreign country may impose heavy tax for international companies and less for domestic companies on business transaction payments.

Mode of Payment: There are certain countries which does not support high tech based payments methods like UPI due to security reasons. On the other hand there are many developed countries which may not have the system to entertain traditional system of payments. This will impact the payment cycle of the business organisation.

Credit terms: Different countries have different laws for credit terms allowed to the suppliers. As a result, the law for defaulting the payments may not allow foreign companies to claim the full amount in case of a defaulter.

Considering the above ethical concerns, business practices and customs vary from one country to another.