
The main economies affected are Portugal, Ireland, Greece and Spain but other countries, such as Italy and Cyprus, were also adversely affected without having to resort to official help from the IMF or the EU in every case.
The types of opportunity that are likely to present are:- Investment into retail funds – this should be a matter for recommendation by independent investment advisers, rather than lawyers;
- Direct investment into enterprises in the relevant jurisdiction either by 100 per cent acquisition or by the formation of a joint venture; and
- The development of trading relationships such as supply, manufacturing, distribution or agency agreements.
Political risk
Business risks
These remain but are considerably subdued and no investment or business transaction is without risk. What is important is that in assessing risk and reward one behaves as rationally and as carefully as one would with any other investment. It remains the case that one should be careful in choosing business partners or companies in which to invest and that appropriate due diligence is carried out to ensure that the right person or company has been chosen.Be alert
Legal risks
Where one is making a substantial direct investment or setting up a trading relationship in any of the countries mentioned, all the considerations which apply when making an investment elsewhere in Europe will apply equally. These include:- Recognising that different systems of law, some of which are based on civil law principles (eg Portugal, Spain and Italy) and others of which are based on a common law system more akin to that applicable in the UK (eg Ireland and to some extent Cyprus), apply in each country. Greece is somewhat unique in terms of the sources of its law;
- Although EU law seeks to harmonise laws across different jurisdictions, there is as yet no single European contract law and other harmonisation programmes often offer alternatives. Whilst all EU jurisdictions should have implemented legislation equivalent to the Commercial Agents Regulations, in some countries such legislation only applies to agency contracts relating to goods. In other countries the protections afforded by the legislation extend to agencies in respect of services;
- Company and other laws will differ much from country to country and, while contracts can normally be made subject to English law and jurisdiction with local courts respecting those choices, mandatory provisions of company law cannot be ignored. So local lawyers have to be consulted;
- Accounting standards may vary; and
- There will be nuances between investment regulations from country to country even in the EU and the same is true of insolvency laws.
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