What Is an International Investment?

International investment is the investment or flow of capital (socialism as funds) or other assets by investors in order to obtain the expected benefits. It is divided according to the characteristics of the capital (or funds) movement and the status of investors in the movement. There are three types of international investment: (1) direct investment in which an investor invests in a foreign enterprise and controls its management and operation; (2) indirect investment through a financial intermediary or investment vehicle; (3) the two types of investment Flexible forms of investment mixed with other international economic activities. ^[1]

International Investment

(Economic behavior)

Working in distant places of different cultures is far more difficult than domestic. Conversely, domestic companies have a competitive advantage. Therefore, companies must have some positive reasons for investing internationally.

(One)

To China

1. Based on the length of time, international investment can be divided into long-term investment and short-term investment.

2. Based on the availability of investment management rights, international investment can be divided into

Institutions can do some specific investment activities. Such as buying government bonds, but can not carry out particularly risky investment activities.

Institutional outbound investments include bond investments and other investments (including

Brief description

International investment is the product of the development of the commodity economy to a certain stage, and with the

The current development trend of economic globalization and the fact that international investment has replaced international trade as the main driving force for international economic development. Combined with the practice of overseas investment in China, this article focuses on the legal risks of China's overseas investment. These issues mainly include the definition of legal risks, the causes of legal risks, what legal risks are encountered by overseas investors in China, and how to prevent these risks.

The overall structure of this article consists of five major sections and prefaces and postscripts. In the foreword, the thesis states that overseas investment is an inevitable trend of China's economic development. Domestic enterprises are rushing to develop overseas. At the same time that they have gained more development space, these investors have also encountered various legal risks, especially in recent years. Some large enterprises have suffered significant legal risks overseas, causing significant economic damage to enterprises and the country. However, China s overseas investors, government agency managers, and academia have a serious lack of knowledge and research on legal risks. Therefore, the author believes that in the era of the rule of law, it is necessary to strengthen the research on the legal risks of overseas investment by enterprises and attach great importance to and prevent legal risks.

The first part of this article first defines the meaning of legal risk and elaborates that legal risk is neither an illegal risk nor a legal liability or a liability for breach of contract. It refers to the fact that people do not understand legal norms, neglect legal review, and evade the law in the process of production and life. Supervision makes its specific legal actions violate the rights of the law or other subjects protected by the law, thereby creating the possibility of adverse legal consequences contrary to the subjective wishes of the actor. This section also briefly analyzes the characteristics of the five aspects of non-normative, unanticipated, unfavorable, insurable and preventable legal risks.

The second part of this article outlines some of the major risks in the legal risks of overseas investment in China. It includes the legal risks of choosing the legal form of enterprises in overseas investment, the legal risks of contract behavior, the legal risks in operation, the legal risks of intellectual property rights, the legal risks of overseas investment tax legal differences, and the legal risks of corporate legal cultural differences.

The third part of this article mainly analyzes the causes and harmfulness of legal risks in overseas investment. The main reasons for the legal risks of overseas investment include incomplete legislation in the host country and discrimination in law enforcement, inadequate domestic legal systems in the investor's home country, severe lag in information services, weak legal awareness of overseas investors, and internal management and governance of investment companies The system is imperfect. Legal risks may cause commercial losses to overseas investors, cause great waste of social resources, and inhibit the development of overseas investment.

The fourth part of this article mainly provides measures to prevent legal risks of overseas investment from the perspective of the home country. Propose to strengthen publicity of legal risks; provide information on the legal system of major countries for overseas investment; improve the legal system for overseas investment approval to prevent illegal investment; use international treaties to prevent host countries from abusing the legal system; make full use of measures such as mutual legal assistance to prevent legal risks.

The fifth part of this article mainly provides measures to prevent legal risks of overseas investment from the perspective of overseas investors. Strengthen legal knowledge training, improve investor legal awareness; improve internal governance mechanisms for corporate legal risk prevention, establish and improve corporate rules and regulations, improve corporate governance structure, establish corporate legal advisory system, and sign, perform and archive contract texts Perform effective contract management in three stages; improve the intellectual property management and protection mechanism of overseas investment enterprises; finally, strengthen the construction of corporate legal culture, carry out various activities to promote legal culture within the enterprise, and select Chinese and overseas Chinese as the cross-border for overseas investment enterprises Cultural management talents, making full use of cultural information platforms.

International investment scale globalization

Knowledge of international investment structure

Centralization of international investment regions

Union of International Investment Forms

along with

The main methods of international direct investment (FDI):

I. Participation of equity in international direct investment

1. Meaning of equity participation: Equity participation refers to a direct investment method based on ownership and through decision-making management rights (holding ordinary shares) to achieve effective control or influence on the enterprise.

2. Owning All Equity-Sole Proprietorship

(1) Significance and impact on investors

Can have absolute management control

Can own all foreign profits

Conducive to keeping know-how and trade secrets

Must take risks independently

(2) Significance and impact on the host country

Can make up for insufficient production in host country

Can increase host country's income (tax,

Before determining an overseas investment strategy, investors must first understand the risks of overseas investment, including:

Exchange rate risk of the currency of the investing country and RMB: The uncertainty of the currency exchange rate of the investing country and the appreciation of the RMB will affect the return on the final investment.

Soundness of the laws and regulations of the investing country: Overseas investment, whether it is the purchase of asset-type products or investment companies, without the stable and sound legal guarantees of the investing country, the higher the return, the higher the risk may be accompanied.

Transparency of the investment country system : The transparency of the investment country system determines whether you will encounter the possibility of corruption and bribery in the investment process. If there is, it will greatly increase the complexity of your investment operations.

Credit risk of the investing country : The credit rating of the investing country as a whole and the financial institutions will affect the long-term value of your investment.

Risks of domestic policy : The inconsistency of domestic policies on overseas investment may affect the coherence and operability of investment. In addition, investors must pay special attention to changes in China's diplomatic and economic relations with the investing countries.

Policy risks of investing countries : Changes in the diplomatic and economic relations of investing countries to China will also affect investment risks.

Understanding the risks of overseas investment will help investors better determine overseas investment strategies.

The European debt crisis has spread further, but it may be a good time for Chinese investors to invest overseas. Gao Xiqing, deputy chairman and general manager of China Investment Co., Ltd., wrote that there are also many opportunities in the international market. It is possible to obtain favorable terms and conditions, etc. which are difficult to obtain under normal circumstances. " However, Gao Xiqing emphasized that Chinese companies' overseas investment still faces four major challenges: foreign regulation, lack of experience, immature investor mentality, and talent mechanism.

According to the Hong Kong Wen Wei Po report, Gao Xiqing believes that the regulatory challenges encountered by China's overseas investments are roughly two-tiered. The first is that the relevant laws and regulations in some countries are particularly complicated. If you pay little attention, you will fall into the dilemma of violations, resulting in high compliance costs. The second is that regulatory agencies in some countries may use regulatory laws and regulatory mechanisms to impede China's overseas investment for ideological or political considerations.

Brief description

Shares in Morgan Stanley, shares in Rio Tinto, three major oil giants hit $ 10 billion overseas ... In the face of Chinese capital, the United States

China Overseas Investment Conference

On September 6, 2011, the first "China Overseas Investment Conference" press conference was held in the multifunctional hall of the Media Center. Chairman of Hong Kong Chinese Chamber of Commerce, Executive Chairman of China Overseas Investment Conference

From the perspective of Luo Baitao, a person in charge of an investment promotion association in Frankfurt, Germany, the growth rate of investment in Europe by Chinese companies, especially private companies, has been surprising in the past two years. "Last year, the European debt crisis began to spread, but Chinese companies ranked first in the number of investment projects in Germany, and even kindergartens that specialize in receiving Chinese children have also started.

As another supporting detail of the "New 36 Articles", 13 ministries and commissions including the Development and Reform Commission, the Ministry of Finance, and the Ministry of Commerce jointly issued documents to guide and support private enterprises' overseas investment and financing, and create a good policy environment for private enterprises to "go overseas."

"Integrating the Breakthrough Road" in Crisis

From the perspective of some private entrepreneurs, the newly released "implementation opinion" at least shows that the government has noticed the significance of private enterprises going overseas. "Going out" to acquire high-quality assets, expand living space, and avoid strong protectionist trade has become the only way for private enterprises to grow bigger and stronger. This is particularly urgent in the face of weak external demand.

Judging from the experience of Chinese companies going global, the financial crisis of 2008 can be regarded as a watershed. Previously, most of the enterprises that carried out overseas investment were large state-owned enterprises and state-owned enterprises. However, in the global economic situation, some high-quality overseas enterprises are facing financial difficulties and urgently need someone to take over the market. More and more Chinese private enterprises are smelling the opportunities.

Taking Zhejiang, a large private economy, as an example, it has developed rapidly as one of the important indicators of foreign investment. In 2008, there were only five overseas investment projects realized by Zhejiang private enterprises through mergers and acquisitions. The Chinese investment in the mergers and acquisitions projects was more than US $ 58 million. From 2009 to 2011, the number of Zhejiang private enterprises' overseas mergers and acquisitions increased year by year, which were 20 , 43 and 45.

The non-optimistic import and export situation will undoubtedly speed up the pace of going global for private enterprises.

According to the latest data released by the General Administration of Customs, despite the slight recovery since the second quarter, in the first half of this year, China s total foreign trade import and export value increased by only 8% year-on-year.

With fewer orders and thin profits, more and more traditional industries have begun to face the international market and compete for profit. Zhang Jianhua, chairman of Shandong Xinhuajin Group Co., Ltd. said that in the past, a wig product with a factory price of US $ 60 in Xinhuajin was sold to foreign wholesalers for US $ 200 and sold to consumers for US $ 1,000. All the money was earned by foreigners. In 2009, the company acquired a marketing company in the United States, and the difference in the intermediate links was recovered.

Other companies have achieved consolidation through mergers and acquisitions. Zhejiang Fulida Group, which is engaged in textile printing and dyeing industries, invested $ 250 million to acquire Newsilver Canada in order to enter the upstream industry chain, stabilize raw material channels, and improve the profitability of the entire group; Geely Group acquired Volvo for $ 1.8 billion The 100% equity and intellectual property rights of cars have become China's first multinational car company. On the first anniversary of M & A, Volvo got rid of the shadow of sales decline for four consecutive years and became a typical case of successful cross-border M & A by private companies.

Zhang Shuming, director of the Foreign Economic Relations Division of the Zhejiang Provincial Department of Commerce, said that mergers and acquisitions have allowed some private enterprises to rush out of the road of acceleration in the crisis. The overseas investment of private enterprises is changing from a single new establishment to a diversified approach such as capital increase, mergers and acquisitions, and foreign contracting projects are becoming increasingly active, which indicates that the private enterprises' international operating capabilities are gradually increasing.

Various domestic financial regulations and various policy adjustments. Many small and medium-sized enterprises and even large enterprises are facing financial pressure. Development requires capital injection and support, but we must also control risks and sources of funds when we obtain funds. Even overseas funds must be operated in a legal and compliant manner to avoid a large amount of overseas hot money affecting the development of the entire domestic economy. Everything has two sides. Investment and financing are permanent courses that every business owner must study for a lifetime. It is necessary to make reasonable use of international funds to contribute to the overall economic development.

The Ministry of Commerce of the People's Republic of China stated on January 16, 2015 that the direct investment of South Korean enterprises in China increased by 29.8% year-on-year in 2014 to US $ 3.97 billion. Japanese companies 'investment in China is in stark contrast. Due to the geopolitical tension between China and Japan, Japanese companies' direct investment in China plunged 38.8% year-on-year to 4.33 billion US dollars. ^[4]

International Investment Book Information

Title: Investing Overseas-Multinational Experts Guide You

Chief Editor: Huang Zhengdong Deputy Chief Editor: Zhang Yaqing

Publisher: Wuhan University Press

ISBN 978-7-307-10870-7

Publication time: June 2013

Edition: 1

Pages: 457

Binding: paperback

Folio: 16

Price: 68 yuan

Categorise Books> Law> Overseas Investment

Introduction to International Investment Editorial Board

Zhengdong Huang is a well-known Chinese lawyer in the United States, a JD from Yale University, and a LL.M from Wuhan University. Senior Partner of Beijing Dacheng (Shanghai) Law Firm, Director of International Business Department, Director of Dacheng Chicago Office. Holds New York, Illinois barrister's license and Chinese barrister's license. Adjunct law professor at Shanghai Tongji University and Wuhan University. Member of the Asia Pacific Committee of the World Services Group since 2012. Dr. Huang has been practicing as a lawyer for more than 20 years. He has extensive practical experience and skills in cross-border investment, international trade, mergers and acquisitions, overseas listings, commercial real estate, dispute resolution and investment immigration. Lead commercial negotiations and draft all necessary documents.

Zhang Yaqing, Senior Partner of Beijing Dacheng Law Firm, Member of the Intellectual Property Committee. He has been practicing as a lawyer for more than ten years. He is good at cross-border mergers and acquisitions, investment and trade, and is familiar with the protection of commercial rights and disputes in the financial, securities, intellectual property and network environments. Can provide enterprises with overseas investment legal environment investigation, project due diligence, assist in commercial negotiations, transaction structure design and document drafting, provide consulting and assistance for government departments' approval, filing and registration procedures, and coordinate overseas intermediary agencies, Legal conflict resolution services in different regions.

Introduction to International Investment Content

Dr. Huang Zhengdong and Mr. Zhang Yaqing, the editor-in-chief of "Investing Overseas-Multinational Experts' Navigation" are written by senior lawyers and investment banking professionals in 36 countries or regions on five continents, with more than 100 participants. They adhered to a rigorous attitude, truthfully introduced the important situation of foreign investment in their respective countries or regions, and gave a deep analysis in combination with investment practices, and introduced in detail the investable areas, investment strategies, and local investment partners of the investment destination country. Opinion is fair. A panoramic view of the investment environment of each country allows Chinese companies to choose the investment destination that suits them, formulate corresponding investment strategies, control investment risks, and reduce investment costs. "Going global" is invaluable to Chinese companies and investors. This book has a large amount of information, high credibility, and strong professionalism, but it is easy to understand. It is a practical overseas investment guide with high value, and it is worth reading carefully. (From: Comment by Dr. Zhiwu Chen, a famous economist and professor of financial economics at Yale University)

International Investment Book Catalog

Going Overseas: New Historical Opportunities and Challenges for Chinese Enterprises

Global Finance and Business Center-Hong Kong

Brief introduction of foreign companies investing and raising funds in Taiwan

Far East Crossroads-Singapore

A glimpse into Malaysia's investment environment

Foreign investment strategy-Indonesia

Eastern Little America-Republic of the Philippines

Hub of Northeast Asia-South Korea

Mekong Regional Investment Guide-Vietnam

M & A in Japan

Investment safe haven-India

A guaranteed investment destination-Israel

Ukraine Investment Guide

Strategies for investing in the UK

Center of Europe-Czech Republic

Investing in Spain: a unique opportunity

Investing in Portugal-an ideal destination

Luxembourg's preferred channel for Chinese investment in Europe

Strategy and Risk Prevention in Investing in Bulgaria

Strategies and risks of investing in Cyprus

Germany: M & A procedures, hidden dangers and risk prevention

Italian Investment Guidelines

Romania-an unusual country with investment potential

Overview of Switzerland for cross-border investment

The pearl of the Danube-Austria

Legal guidance for investors doing business in Switzerland

Overview of Fundamental Legal Issues in Investing in the United States

Buyer M & A Process-Guidelines for Mergers and Acquisitions of U.S. Target Companies

Invest in Mexico

South America investment hotspot-Argentina

"Brazilian Opportunities" for Chinese Investors

Strategies and risks of investing in Chile

Cross-border investment strategy and unknown risks-Ecuador

Australia-the right investment destination

Chinese Outbound Investment-New Zealand

Overview of South African Laws for Overseas Investments

Legal disclaimer

postscript......