The thought of a global market expansion can be very exciting. Imagine that the world is now your playground. Countries you cannot even pronounce, or places you never thought you would travel are now on your business radar. The trade publications (like the one you’re reading) have International distribution and so the four corners of the earth can know who you are, and what you have for sale. Furthermore, the internet has given us all real-time, instant access to all of this information. Yes, it is true sometimes we are working late at night or very early in the morning to capture a far off land’s time zone, but that’s a small sacrifice viewed from the perspective of the more expansive business opportunities just waiting to be embraced.

 The reality is, of course, that much more than a few extra hours of late-night or early morning phone calls are needed to truly seize such opportunities. Take the example of a Gulfstream based and registered in the UAE being sold to a buyer from Indonesia. Such a transaction is bound to be extremely complex and laden with challenges even if you are working with stellar people on both sides of the transaction (complete integrity and the highest standards are an absolute must from all parties in an international transaction).

 Starting way back at the contracting phase of the deal, the contract must deal with multinational laws. These laws differ in terms of liability, tax, regulatory and jurisdiction. Working to find common ground so that both the buyer and seller feel protected (and not at the cost of the other side) will prove a difficult task. The usual ‘give and take’ during the negotiations will be required, but ultimately this is far more difficult than a buyer in New York and a seller in California trying to figure out which state will have jurisdiction in the case of a conflict. Often in that circumstance a neutral state may be chosen. In the International arena there may not be a mutually agreed-upon country readily available.

 The give and take may mean bridging huge gulfs, after which, a delivery location becomes the central issue (along with the mandates of the different countries with respect to Export and Import requirements). Just agreeing on a location for the pre-purchase inspection can be incredibly problematic. Not only might the distances the seller is being asked to move the aircraft be long, but the very idea of finding a service center qualified to sign-off the necessary inspections in a way that will be recognized by the importing country will be another challenge. (Of course, the exporting country has to be satisfied too.)

 Where do you close an international transaction such as this? We have remedied such issues by bringing the airplane back to the US to the OEM to perform the inspections. Now let us imagine that the closing of the UAE-registered Gulfstream transaction was at first contemplated to be in Singapore. Where, then, does acceptance of the airplane take place? Here in the US, before the movement to a closing location? Moving a few states with a plane is easy. When the closing location is fifteen hours away, the seller may have real heartburn about that.

 And would you expect the buyer to accept that if the airplane breaks on the way to the closing location, that’s too bad? Every bit of the process is compounded by a factor of at least ten when taking place across different regions.

 So what else, along with the process generally, is compounded by a factor of ten? You’ve guessed it - the cost of the transaction is certainly compounded. Legal fees are far higher to both sides. It is not unlikely that teams of lawyers will be hired, rather than just one per side, and the buyer and seller will probably have representation that is located in the buying country as well as the selling country. There will likely be representation for both sides in the country of recordation (if different from the selling country). Then there will no doubt be representation for both in the country that wins mutual agreement on jurisdiction if that country is in fact a different country. It’s enough to make your head spin!

The business aircraft industry is not alone in the quest for, and dealing with the complexity of doing business internationally. Almost every industry is trying to expand their goods and services globally. Learning the higher costs and greater challenges to complete deals internationally is huge. Each of us engaged in this business must be realistic and have the right expectation for how to claim success. The only constant in this international expansion is that the client’s needs are still the most important; the integrity we apply here is expected globally and the idea that it is a people business first and an aircraft business second. Everything else is different.