Business Consulters, Foreign Investments and Recession
Sometimes companies want to draw foreign investments for their activity. How to reduce risks and feel safer? What do business consulters advise in such cases?
The fists thing is to attract business consulters from the both sides. And it is important not only for foreign investments, but in every case of working with external investments, when investor can prepare a deal deriving only from him own interests and it is important to see it in time and cure the interests of the company.
The presence of the consulters from the both sides lets to keep some certain balance of interests while preparing the deal and serves as safety net for possible errors. Also foreign consulters can be little competent in the economic realities of investing in your country and can base on their experience in internal investments.
It is not such a rare thing when a foreign investor prepares package of documents that has declarations and conditions which don’t correspond to the actual legislation of the interested country or company’s statute.
So we advise to ordain from the very beginning to clear that there must be consulters from the both sides. Their task will be to proclaim mutual agreements accordingly legal rights and interests.
To avoid disputes or misunderstandings in the following: in the preliminary agreement form, size, terms and conditions of the investments must be stated, as well as membership and competence of the enterprise’s leadership after the enclosure of the investments; the order of solutions adoption in the process of investments enclose and after it; conditions of possible sale of the shares to third persons etc. as well as other conditions influencing rights and duties of their business owners.
If the planned investments will be mutual, and the interested country also plans to enclosure some means, it has to be taken into consideration that “limited liability company” reserves the right of each member to leave the company wherever he wishes. So leaving the company with 60% shares the member will leave the enterprise with significant damage.
Also it has to be noted that all the documents which are supposed to circulate on the territory of the interested country must be composed on its language. We advise to pay special attention to the place of examination of disputes and acting legislation. Sometimes it can happen that after some months or even years of participation in the foreign investor, some dispute can’t be regulated through negotiations and the interested country suddenly realizes that arbitral court is not its native but some “international commercial arbitrage”.
The conclusion is obvious: when drawing foreign investments, one has to supply qualified competent specialists on its side. This way, specialists, having the necessary experience and knowledge, can develop and organize the investments model which will correspond to all the necessities and interests of involved parts in general and its client in particular. Being twice prudent and preparing a solid legislative base has never damaged to anyone.