An entrepreneur can successfully expand and grow his/her business abroad by taking into account the basic legal framework of the home country as well as of the particular foreign country. It is necessary for him/ her to abide by such laws and regulations in order to ensure efficient and healthy functioning of the organisation and face the various challenges that he/ she may encounter abroad. In India, the most important law which regulates all foreign exchange transactions including investments abroad is the Foreign Exchange Management Act (FEMA),1999. It is an investor friendly legislation which aims to facilitate external trade and payments as well as promote an orderly development and maintenance of foreign exchange market. Under the Act, Reserve Bank of India (RBI) has been authorised to frame various rules, regulations and norms pertaining to overseas investments in consultation with the Central Government.

In order to encourage capital inflows and provide safe business environment for all investments abroad, many countries have entered into bilateral investment treaties or agreements. Bilateral Investment Promotion and Protection Agreement (BIPA) is one such bilateral treaty which is defined as an agreement between two countries (or States) for the reciprocal encouragement, promotion and protection of investments in each other's territories by the companies based in either country (or State). These bilateral agreements have, by and large, standard elements and provide a legal basis for enforcing the rights of the investors in the countries involved. The Government of India has, so far, signed BIPAs with 58 countries out of which 49 BIPAs have already come into force and the remaining agreements are in the process of being enforced.

Arbitration and Conciliation Act, 1996 is another law which provides solution to business disputes for an entrepreneur. It consolidates and amends the laws relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and also defines the law relating to conciliation. Arbitration is an alternative dispute resolution mechanism in which the parties get their disputes settled through the intervention of a third person and without having recourse to the court of law. While, conciliation is the process of amicable settlement of disputes by the parties, with the assistance of a conciliator. In India, the Indian Council of Arbitration (ICA) established in 1965 is the apex arbitral organisation at the national level which provides facilities for arbitration of commercial disputes.