Legal Writing Research Communications Law

Question: Discuss about the Legal Writing for Research Communications Law. Answer: Legal aspects of being a foreign investor and investing in Nicaragua versus its competitors It is imperative to note that foreign investment tends to entail capital flows from one given country to another thus giving way to all-embracing ownership stakes in respective domestic assets as well as organizations (ODonnell, 2004). Suffice to mention that foreign investment signifies that foreigners have an important and active responsibility in management as apart of their respective investment. An up to date tendency more often leans towards globalization whereby multinational organizations have various investments in a number of nations. Foreign investment is widely viewed as an important catalyst for economic growth in the later prospect. This is majorly because they can be made by individuals; nonetheless, they are most often activities which are practiced by corporations and companies with considerable assets looking to expand their reach (Nachbar, 2009). In this particular write up, we are going to evaluate the legal aspects around foreign investment in Brazil, Ecuador, Ni caragua, Guatemala, and Costa Rica as well as the implications of starting a forestry industry in Nicaragua. Evaluation of the legal aspects around foreign investment in Nicaragua Even though the Nicaraguan supervision look to boost economic development in part by escalating overseas investment, the nations feeble legal system, corruption, and property tilting issues tends to construct business challenges which are in service or desire to operate in the country (Marmor, 2004). The aforesaid vices are also quite prominent in other such Hispanic countries, for instance, Ecuador, Brazil, Costa Rica, and Guatemala. The weak political systems which are present in the aforementioned nations tend to further weaken the attractiveness and potential foreign investments which are present. In order for Nicaragua to catch the attention of investors, the country offers investment enticement in a number of industries including tourism, mining, and forestry sectors. Various incentives include property tax incentives, exclusion from income tax relief, and in other cases, import duties (Kramer, 2004). An additional draw for overseas investors is the Nicaraguan work force as inexpert manual labor is extensively accessible and is considerably low-priced. Moreover, the country has reasonably young inhabitants with at least 76% of Nicaraguans under 39 years of age (Greenstein, 2005). On the other hand, potential investors ought to be fully conscious of the nations political atmosphere as the countys president, Ortega, previously cited that his goal in Nicaragua is to employ a socialist type of administration, which he further defined as a varied economy which would be directed by both socialist and Christian ideologies (Bingham, 2007). In order to attain this balance between the private and state division participation in the economy, he proposed to make use of funds which Venezuela offered via the Americas (ALBA) Bolivarian alliance so as to amplify the role of state and quasi-state actors in the financial system. This would be of great limitation as it can put firms which are privat e to compete at a drawback. Another negative vice in Nicaragua is public sector corruption; this includes the bribery of public administrators, which stays a huge test for firms, especially countrys American firms. Furthermore, American sponsors have recently raised worry about their property rights in with respect to a suggested Inter-Oceanic canal (Paterson, 2013). In the year 2013, the government of Nicaraguan approved the Hong Kong Nicaragua progress Group a centurys worth of concession to construct the proposed canal with no chance for public comment and competition. It is important to note that the Nicaraguan legislation that approves the canal compensation states that land owners will be compensated at cadastral value which the United States investors fear will be in violation of the government of Nicaraguans duty as well as below market value under the agreement between the and the United States, Dominican Republic and Central America for free trade (CAFTA-DR) (Schauer, 1991). The aforementioned has prompted the American embassy at Managua to remind the Nicaraguan government of its duties under CAFTA for instance, the frankness to and limitations upon international venture attitudes towards international straight investments. The nation wants to lure direct foreign investments as one of its main tools to bring about financial growth and amplify employment (Schauer, 1991). Suffice to say that a number of the investment enticement are intended to lure various overseas focused companies that need huge amounts of low skilled and unskilled labor. Law/guidelines of foreign direct investments incorporate the free trade contract between the United States , Dominican Republic and Central America which was entered into force on 1st April, 2006 specifically for the United States and Nicaragua . A safe, legal structure for American investors in the Dominican Republic and Central is established by the CAFTA-DR investment chapter America (Raz, n.d.) . In addition to CAFA-DR, the nations oversea investment law defines the lawful structure of overseas investments; this means that the legislations allow for 100% international ownership in a majority of industries.. The principle of national treatment for investors which guarantees foreign exchange conversion as well as profit repatriation thus clarifying foreigners access to local investment reaffirming respect for private assets are also established by investors national treatment principles. . Evaluation of the legal aspects around foreign investment in Ecuador Latin America has become quite a friendly place for investments given the well established institutions, well developed mechanisms for establishing businesses and welcoming international investments, and good respect for the rule of law (Marmor, 2004). While foreign direct investment globally fell at least by 18% in the year 2012, in Latin America, FDIs grew by at least 7% (Kramer, 2004). It is quite necessary to emphasize big infrastructure investments in Peru, Brazil, and Ecuador, growing, mining, and energy investments in Ecuador's stable economy. In accordance to the World Banks Doing Business Report, Latin American countries were considerably ranked. The recent victory of a number of listings tends to confirm robust demand for novel investment opportunities. Ecuador is a medium-sized economy with enormous prospective and the American dollar as the national currency has seen high export oil prices that allowed the Ecuadorian financial system to return from the worldwide fiscal crisis in addition to sustainable and high level of expenditures of government (Greenstein, 2005). The leading sectors for international investments, viz a viz, the market opportunities in Ecuador are in petroleum, commercial sectors, oil and mining, natural resources industry, electricity, plastics machinery, hydroelectric industry, water resources equipment, orthopedic equipment, automotive parts, and telecommunications equipment (Bingham, 2007). The Ecuadorian government also benefits the economy through a novel production code that encapsulates a variety of measures such as lawful protection for investors, investment incentives, clear and concise rules and incentives for both national and foreign investors, predictability and stability, and lawful security. Nati onalization or confiscation is not allowed by law. With regards to profitability, it is suffice to mention that the country has more than 20 tax and non-tax incentives which are cumulative, deductions, and income tax exemptions, international regulations which include equitable and just treatment, nondiscriminatory or arbitrary treatment, and high levels of protection (Paterson, 2013). The most important tax benefits for investors in Ecuador include income tax rate reduction, total exemption from income tax for at least five years for novel investments which are made in priority sectors of the economy, exemption from the minimum income, and tax calculation. For novel firms, the exemption from the minimum tax payment for the initial five years is also put into consideration. Exemption from capital outflow tax for payments which are sent overseas on international loans, a further reduction of at least 5% points on income tax, and for operators of ZEDE, a zero value aggregated tax rate for import of goods are some of the perks which are involved in international investing in Ecuador (Schauer, 1991). It is important to note that foreign goods are not subject to the payment of tariffs while they remain in ZEDE zones. With all of the aforesaid as a truly beneficial and protection cover, Ecuador also vigorously carries out business with China as their commercial associations are quite closed and developed. It is estimated that approximately $6billion of Chinese capital credit has been allowed for projects to be carried out in Ecuador by China businesses and factories (Raz, n.d.). With regards to the actual legal structure, the conventional entry strategy in Ecuador is to initially appoint an agent, stocking distributor, and law firm. When signing up the domestic distributor, foreign companies ought to seek counsel from an Ecuadorian law firm so as to ensure appropriate safeguarding. This particular procedure for establishing an office is normally entrusted to domestic lawyers. Conversely, international investors who are setting up a trade and commerce(business) in Ecuador establish local branches or corporations offshore entities (ODonnell, 2004). Such options include limited liability companies, joint ventures, partnerships as well as mixed economy companies; this is when government engagement is included. In reference to sales of government, a local representative or agent is lawfully required and is often a practical requirement when initially entering the Ecuadorian market. Evaluation of the legal aspects around foreign investment in Costa Rica Costa Rica held its presidential elections in the year 2014. In the history of this country it was the second time when a run-off was needed. The president and his center left party did not have a majority in Congress neither did the party who has the most Congressmen elected by party. This uniquely is an indication of how Costa Ricas democracy is development where the army was abolished at least 66 years ago in the year 1948 (Nachbar, 2009). Even though international investment promoters were a little careful during elections, nothing has drastically changed in Costa Rica, and the nation stays a country which inspires international investment. Myriad multinationals have recently declared that they will be moving all or part of their facilities to Costa Rica. This proves evidence of the existence of the favorable climate for conducting business and that investment is relatively secure and safe. Legal system of Costa Rica is largely founded on civil law and the federal system is nonexistent (Marmor, 2004). There are basically no limitation on international investments in the country, meaning that there are no limitations on indirect or direct investments except for transactions which are associated with the operation of public ports, the ownership of specific coastal lands as well as natural resource concessions, money laundering, drug trafficking, together with the financing of terrorism are hugely shunned upon by the legislations. Even though there are no limitations on international investments in Costa Rica, there exists a strict regiment of anti-money laundering regulations which needed reporting cash transactions over US$10,000 (Kramer, 2004). Furthermore, no reporting requirements or limitations associated with business transactions with non-resident or resident. The up to date international currency exchange is inclined to allow free conversion and possession of international currency into the local one, which is the colon (CRC), and vice versa. The exchange rate is usually regulated by a floating system of bands; this means setting of maximum and minimum rates whereby the central bank of Costa Rica has the autonomy to intervene in the market so as to maintain monetary stability (Greenstein, 2005). United States dollars are widely accepted and available almost everywhere. It is also quite possible to purchase United States dollars at a number of fiscal institutions since there is an absence of lawful or practical restrictions from payment from Costa Rican entities to foreign counterparties. Moreover, Euros can also be chenged at any main fiscal institution. With regards to incentives and grants, the principal incentive systems which consist of tax exemptions include free trade zone motivations. The tax rate in Costa Rica is also considerably reduced and is between 6% - 9% for the first 6year term (Bingham, 2007). What is more, free trade zone organizations tend to also be exempted from other taxes, for instance, forestry incentives, dividend withholding tax, import taxes, as well as sales tax. The Government of Costa Rica offers numerous tax benefits in the form of certificates for forest conservation in order to compensate landowners for environmental services which are rendered to the nation through the preservation of forests that are located on private property (Paterson, 2013). Notably, the political constitution of Guatemala offers legislative authority to the Congress of the Republic. This in turn offers certainty that no other entity, local or international, shall create direct or indirect taxes (Raz, n.d.). The country is part of the Multilateral Investment Guarantee Agency (MIGA) which is charged with the responsibility of facilitating private capital investment flow to developing nations, while at the same time offering guarantees against risks such as lack of currency convertibility, civil war or riots, and expropriation. Guatemala arguably has the largest economy in Central America with an estimated US$58.7billion GDP and this was in the year 2014. The country has also anticipated at least a 4.1% growth rate which was realized in the year 2015 (ODonnell, 2004). Transfer of funds mostly from America also considerably increased by at least 8.6% in the year 2014 and was comparable to a 9.4% of the GDP. America is the nations most significant economic partner. The Guatemalan government continues to improve its competitiveness, work on legislative reforms aimed at supporting economic growth, and promoting investment opportunities. More than 250 U.S. and other international firms have active investments in this particular country benefiting from the CAFTA-DR (Nachbar, 2009). The Foreign Direct Investments stock was US$12.1billion in the year 2014. This roughly converts to an 18% increase with regards to the year 2013. More still, foreign direct investment is predominantly in the agricultural sector and the mining and energy infrastructure. Notwithstanding the positive steps which have been taken in order to improve Guatemalas investment climate, international firms opting to invest in the nation face considerable challenges. Confusing and complicated regulations and laws, bureaucratic impediments, inconsistent judicial decisions, as well as corruption, continue to constitute practical hurdles to investment (Marmor, 2004). Under the CAFTA-DR obligations, America has raised significant concerns with the Government of Guatemala regarding its enforcement of both its environmental and labor laws. In the year 2015, the presidents of Guatemala, Honduras and El Salvador, and Vice President Biden signed a Joint Statement of Commitments in order to implement specifics of the northern triangles plan for the alliance for prosperity (Kramer, 2004). They subsequently agreed to promote various strategic areas of interest such as creating economic opportunities, energizing the productive sectors of the economy, developing human capital, social inclusion, and citizen safeguarding. In the same year, a grant agreement between the Millennium Challenge Corporation (MCC) and the government of Guatemala was signed for a US$28million which will be a three-year threshold program with the GoG to support GoG revenue mobilization reforms and offer quality educational opportunities, both of which are inclined to address binding c onstraints to economic progression (Greenstein, 2005). Evaluation of the legal aspects around foreign investment in Brazil Brazilian commodity prices are focused to be stable within the oncoming years with a growth which is more rapid than anticipated as various infrastructure projects become a reality. Additionally, the building boom for the World Cup during the year 2014 and the recently concluded Olympics were in full form, not to mention, the dozens of logistics and infrastructure projects that have proven to improve Brazils worldwide competitiveness. Recently, many international investors have been lured by the large Brazilian market and the fiscal growth of the nation. Even though it is true that all forms of Foreign Direct Investments are embraced by the Brazilian Constitution, this represents a commitment to economic development (Bingham, 2007). Expropriation of local or international investment is not permitted by the Brazilian Constitution, except in special instances such as public interest. The Brazilian Constitution has not placed any distinction between local and international capital since 1995. The main lawful statute controlling foreign investments in this particular country was enacted in more than forty years ago. This is considered to be a positive point for investors, the fact that the most significant law on FDI in Brazil has been in force for a long time and has not suffered substantial changes especially during these last years. (Paterson, 2013). Conclusion As we have discussed above, being a foreign investor in Latin America especially in Nicaragua, has proven to provide its own unique challenges. Nonetheless, as a realization, we have noticed that public sector corruption is the most negative mitigating factor when it comes to investing in Latin America. Conversely, we have also noticed that key players in Latin American economy have raised significant questions which have been partially answered. One of the chief organizations which address these issues is the CAFTA-DR which keeps watch over the underlined infringements which may prompt foreign investors not to invest in Latin America. All in all, investing in the forestry industry in Nicaragua is significantly achievable due to various policies which have been enacted and as a result tend to favor investing in this sector. References Bingham, L. (2007). The rule of law. Cambridge Law Journal, 66(1). Pp. 67 85. Greenstein, R. (2005). Why the Rule of Law?. Louisiana Law Review, 66(1). Pp. 63 94. Kramer, M. (2004). On the moral status of the rule of law. Cambridge Law Journal, 63(1). Pp. 65 97. Marmor, A. (2004). The rule of law and its limits. Law and Philosophy, 23. Pp. 1 43. Nachbar, T. (2009). Defining the rule of law problem. The Green Bag, 12. Pp. 303 318. ODonnell, G. (2004). Why the rule of law matters. Journal of Democracy, 15(4). Pp. 32 46. Paterson, P. (2013). The rule of law in Latin America. Oxford: Oxford University Press. Raz, J. (n.d.). The rule of law and its virtue, in Raz, The Authority of the Law: Essays on Law and Morality. Oxford: Oxford University Press. Schauer, F. (1991). Rules and the rule of law. Harvard Journal of Law and Public Policy, 14(3). Pp. 645 695. Tamanaha, B.Z. (2006). Law as a means to an end: Threat to the rule of law. Cambridge: Cambridge University Press.