HBCU Money™ B-School: Investing Across Borders Interesting Facts


By World Bank Group

20121027_INC343

Investing Across Sectors

  • More than a quarter of the 87 countries surveyed by Investing Across Borders (IAB) have few or no sector-specific restrictions on foreign ownership of companies.
  • Smaller countries have fewer restrictions on foreign ownership of companies, while larger countries — such as China, Mexico, the Philippines, and Thailand — are among those with the most.
  • Countries in Eastern Europe and Central Asia and Latin America and the Caribbean tend to be the most open to foreign ownership of companies.
  • Though services account for a growing share of global foreign direct investment (FDI), foreign ownership of companies is more restricted in the service sector than in the primary and manufacturing sectors.
  • Worldwide, restrictions on foreign ownership are strictest in media, transportation, electricity, and telecommunications industries.
  • Most countries allow foreign ownership of equity in alternative energy companies — with some countries in Middle East and North Africa being notable exceptions.

Starting a Foreign Business

  • In most countries measured by Investing Across Borders (IAB), starting a foreign company takes longer and requires more steps than starting a domestic company.
  • The most common additional procedure required of foreign companies is the foreign investment approval or declaration, required in 48% of the 87 surveyed countries.
  • In Eastern Europe and Central Asia, the additional procedures required of foreign businesses add only 4 days on average to the total start-up time.
  • Georgia and Rwanda have the fastest process for starting a foreign business of all measured countries.
  • Only 3 of the 87 surveyed countries do not have their commercial laws and regulations publicly available online.
  • Companies are able to download business registration forms in 59% of all measured countries, but only 18% of them offer electronic registration services.
  • Four out of the 87 surveyed countries do not allow foreign companies to hold foreign currency bank accounts.
  • Haiti is the only IAB country where the minimum capital requirements are more favorable for foreign than domestic companies.

Accessing Industrial Land

  • In 1 in 4 of the countries surveyed by Investing Across Borders (IAB), foreign companies cannot own private land.
  • All the countries surveyed allow foreign-owned companies to lease land.
  • More than half the countries surveyed do not allow foreign companies to use land leases as collateral.
  • It takes as little as 10 days to lease private land in Armenia — and as many as 149 days in Nicaragua.
  • Across the 87 IAB countries the average time it takes to lease land from the government is more than twice that required to lease land from a private holder.
  • Nearly two-thirds of countries require an additional approval to authorize the lease of government-held land to foreign companies.
  • In only one-third of countries with both a land registry and cadastre are the two public agencies linked to share data, facilitating information access.
  • Less than half the countries do not provide accessible public documentation on previous environmental impact assessments conducted on industrial lands.

Arbitrating Commercial Disputes

  • All Investing Across Borders (IAB) countries recognize arbitration as a tool for resolving commercial disputes, and only 8 of the 87 countries do not have a specific arbitration law: Albania, Argentina, Bosnia and Herzegovina, Ethiopia, Liberia, Mali, Montenegro, and Poland.1
  • About half of IAB countries have laws that distinguish between domestic and international arbitration.
  • The Czech Republic and Mexico are among 17 IAB countries where businesses can conduct arbitration proceedings online.
  • In most countries in Latin America and the Caribbean, foreign lawyers without local bar membership are not permitted to represent parties in arbitration proceedings.
  • There are no functional arbitration institutions in Cambodia and Sierra Leone, while Colombia and Malaysia have many active institutions.
  • In most countries in East Asia and the Pacific, laws do not require courts to assist during arbitration proceedings with orders for production of evidence or appearance of witnesses. In contrast, 4 of the 5 IAB countries in South Asia legally require domestic courts to assist in arbitrations.
  • Many countries in Eastern Europe and Central Asia have adopted special rules to ensure fast enforcement proceedings of arbitration awards, such as establishing special authorities outside the judiciary to issue writs of execution.

http://iab.worldbank.org/Data/Interesting%20Facts

1.Source: Investing Across Borders 2010.

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