Trade Horizons’ Market Entry Blog

Investor state arbitration is when a company claims a breach of a state’s obligation to protect the investment it made when the company entered the country. A claim can be made if a bilateral investment treaty exists between the headquarter country and host country, and in some cases if a free trade agreement exists. If you enter a country that has a bilateral or free trade agreement with your home country, you may be able to enact investor state arbitration if the host country does not fulfil its obligations to you which is cheaper faster and less public than litigation.

In June 2022 Pakistan has attracted the highest level of FDI since October 2020 according to a report. The results indicate recovery after the pandemic. Pakistan has had a troubled few years what with the latest development Prime Minister Imran Khan forced out of the position to be replaced by the brother of the Pakistan Muslim League-N (PMLN) candidate accused of corruption and the economic crisis including dwindling foreign currency reserves and higher fiscal and current account deficits.

The Chilean Central Bank has reported record-breaking FDI levels in the first 6 months of 2022 with levels 66% above the same period in 2020. US$13.7 billion is the highest level ever recorded. Most popular sectors are retail, manufacturing and wholesale. Around 65,000 companies in Chile are financed by foreign capital which equates to around 10%. One United Nations report says that the increase is fuelled by several large acquisitions and renewed interest in mining projects.

Cyprus has launched an action plan to increase tax certainty and attractiveness to foreign investors. Currently is takes less than 2 weeks to setup a business in Cyprus and open a bank account however the regulatory environment is complex and uncertain, making it a high-risk destination. The country has one of the lowest costs of doing business and is strategically located. The reforms are designed to improve the environment for investors and increase foreign direct investment. The most notable reform regards transfer pricing: the Cypriot Government has recently passed legislation to bring it into line with OECD standards. This development will increase transparency and therefore decrease risk of doing business in Cyprus. Previously, no detailed documentation existed on this topic in particular the arms-length principle.

The first National Manufacturing Day will be held on 7 July. Initiated by MAKE UK, the UK’s Manufacturing industry body, the day will host a number of events nationally hosted by member companies. So far 109 employers have pledged to open their doors to the local community so people can see how things are made, and are hosting their own events including RNLI opening its doors to its Lifeboat Centre in Poole Dorset where lifeboats are manufactured.

Global automobile manufacturers plan to spend more than half a trillion dollars on vehicles and batteries by 2030 according to the Global EV Outlook report. Zero carbon and ultra low emission zones in major cities have increased the previous estimate over the past three years by almost 100%. Electric vehicle sales doubled in 2021 spurred on by rising fuel prices, improved infrastructure and emissions charges from governments. Electric vehicle sales are up 75% in the first quarter of 2022 on 2021.