Asian giants should fuel freer cross-border investments

While the world hopes the global meltdown will soon be a thing of the past, investment activities in major economies come under close scrutiny. Simultaneously, the existing legal and regulatory regimes are being tested against investors’ need to invest and corporations’ need to consolidate their positions in the global market.

Looking beyond the borders

One way to achieve better growth is to look beyond a country’s borders. In most cross-border investments the key considerations are likely to be:

(i) The legal regime that governs the target (and is it in harmony with that which governs the investor or acquirer?); (ii) the legal barriers to a particular structure (there may be pre-emptive or restrictive clauses governing the investee company that make an acquisition difficult); (iii) the challenges of acquiring an asset or a business as opposed to acquiring shares; (iv) consideration payable, and its financing or funding; (v) competitive bidding versus private agreement; and (vi) various tax implications.

Kalpataru Tripathy is a partner at Amarchand & Mangaldas & Suresh A Shroff & Co, where Saurya Bhattacharya is an associate. The views expressed in this article are those of the authors and do not reflect the official policy or position of Amarchand Mangaldas.