The new Doing Business In… 2021 guide covers 46 jurisdictions. The guide provides the latest legal information on restrictions to foreign investments, corporate vehicles, employment law, tax law, competition law, intellectual property (IP), data protection and upcoming legal reforms.
Last Updated: July 13, 2021
Doing Business In... 2021 – Global Overview
The third edition of Chambers Global Practice Guides: Doing Business In... is issued more than one year into the COVID-19 pandemic.
While there now appears to be some light at the end of the tunnel, in many respects the pandemic still defines the world we live in. The economic and social toll is significant. However, despite all the chaos and uncertainty, the global economy did not collapse as could have been expected. The spectacular economic downturn that occurred in the first half of 2020 was followed by a rebound in the second half of the year. The World Bank now forecasts a strong overall increase in economic growth for 2021, although the pace of the recovery may substantially differ in the various regions of the world. This optimism is based on the expected improvement of the health crisis, but also on the major fiscal and economic programmes that have started to be implemented in large economies such as the EU and the USA.
Yet, some of the changes induced by the pandemic could have staying power. Among its many consequences, the pandemic placed material hurdles to the movement of goods and people across countries. This occurred at a time where powerful political forces placing increased constraints on international trade were already at play. These two elements combined to dry up the level of international trade and investments, which many countries need to sustain economic growth. There is uncertainty as to whether international trade and investments will regain their full strength in the near future. However, it is possible that a change in the new US administration’s trade policy and an improvement in global health as more and more people are vaccinated could reverse the current trend.
The COVID-19 pandemic also contributed to reinforcing barriers to foreign direct investments and cross-border M&A. A notable trend in the past few years has been the strengthening of foreign investment screening rules to protect national companies and their technology in sensitive industries. This development occurred mainly in Europe, in the USA and in some parts of Asia. During the height of the COVID-19 pandemic, some countries introduced new restrictions to foreign investment or strengthened existing restrictions to try to prevent unwelcome attempts by foreign companies to acquire weakened national champions. These new regulatory constraints, together with travel restrictions, certainly contributed to the slowdown of the cross-border M&A activity experienced in 2020. It can only be assumed that these restrictions will be in place for some time.
Despite all the hurdles, people, companies and markets continue to remain highly inter-connected. Business continues to be conducted across borders. However, investors must keep up to date with the many changes in laws and regulations that are taking place at the moment.
In the early stages of the pandemic, governments took bold measures in immediate response to the crisis. The main objective was to offer support to businesses through stimulus funds, tax incentives or unemployment funding. Legal and administrative frameworks were also adapted to allow companies to continue doing business in spite of mass confinement and the shutdown of public services.
Now that we are well into the pandemic, new priorities and policies are emerging. Governments are taking a long-term view of economic recovery and are anticipating new trends. Whether the goal is to modernise bankruptcy law, corporate law, employment law or tax rules, each country must tailor the response based on its own situation and resources.
There is no doubt that the legal framework in many countries is in the process of undergoing changes as a result of the pandemic. However, other long-lasting circumstances are also shaping laws and business regulations across the world. In this highly integrated world, national laws are required to constantly adapt to the international environment. Governments look at best practices from other countries in an effort to make their legal framework more attractive or to protect their national interests. The speed at which technology evolves is another key factor affecting laws and regulations. The opportunities associated with technological progress cannot be ignored in today’s economy, but they also create legal challenges and require adaptation in many areas of the law. Finally, building more environmentally friendly economies has become a globally accepted goal, which requires an appropriate legal framework.
With this background in mind, the 2021 edition of the Doing Business In... guide sets forth the legal framework to doing business in many countries around the world, including laws and regulations enacted as a response to the pandemic. We hope this guide will serve as a reference for lawyers and investors looking to understand the basic principles guiding the legal system of the contemplated jurisdictions. Because the experts for each jurisdiction have followed a common template, readers can easily compare the rules applicable in each jurisdiction. As a new feature, this year's edition contains additional content addressing recent changes in certain markets that are of particular importance and will be of valuable consideration for those doing business in these markets.
We would like to thank all the participating contributors for their efforts in keeping this Doing Business In... guide up to date, year after year, making it an essential piece of the Chambers Global Practice Guides series.