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Russian Deoffshorization

In the past, foreign investment in Russia has been characterized by the use of offshore structures. Typically, foreign investment would be via a joint venture arrangement, whereby the parties establish an offshore holding company and regulate cooperation through a JVA. However, recent developments in Russia may impact the use of offshore structures going forward and force a reevaluation of existing structures.  

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Slovakia: Limited Liability Company Transfer and Acquisition Obstacles

After long-term unfavorable results and inefficiency in tax collection – in particular value added tax (VAT) – the Slovak government has commenced a fight against tax evasion. As a result of this initiative, the Ministry of Finance of the Slovak Republic has taken a number of measures to increase the effectiveness of tax collection and to move towards at least the average of other European Union member states.  

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Bureaucracy in the Czech Republic: A Brief History and General Advice for the Neophyte

Nobody should undertake a business venture in a foreign country without first seeking legal advice. The plaintiff cry, “But we do it that way at home” will fall on unsympathetic ears in Czech courts. However, the advice of a Czech lawyer might seem very strange, especially if you are from a Common Law environment.  

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Foreign Investment in Montenegro

Montenegro has a small and highly open economic system, and is a stable environment worth investing in, as well as being a globally-recognized tourist and travel destination with high potential for further development. Intensified efforts to develop the national economy and attract foreign capital by creating a favorable economic and political environment and eliminating all types of business barriers have already produced visible results. Despite the fact that Montenegro is facing numerous transitional challenges in its attempts to reach sustainable economic growth and further the process of accession to the European Union, foreign investors have shown a keen interest in investing in the country. That said, there are still several aspects that might act as barriers towards attracting FDI.  

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Ukraine: Compliance is a Priority Matter for Business

Despite the country’s deep political crisis, particularly in the Crimea and the eastern regions of the country, Ukraine still offers tremendous investment potential. Recently Ukraine has signed the Deep and Comprehensive Free Trade Agreement, as well as the broader EU Association Agreement with the European Union. Both agreements could move Ukraine towards a more open and transparent trade regime and improve the country’s investment climate. Currently the global investment community is closely scrutinising the steps that the new Ukrainian President and Government are taking, evaluating the risks perceived by industry leaders, bankers and investors.  

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Challenges of Romania’s Tax Regime for Foreign Investors

Throughout the last couple of years, the Romanian government has initiated various tax measures meant to attract foreign investors and encourage their long term operations in Romania. Although this has always been the ultimate goal, none of the recent Romanian governments have had a coherent strategy to insure conditions for economic development while achieving budgetary balance at the same time. Moreover, a large majority of the tax measures initiated during this period have led to an increase of the tax and bureaucratic burden on all Romanian taxpayers.  

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Foreign Direct Investment in Greece: Turning a Corner

There can be no doubt that the economic crisis in Europe has been felt especially acutely in Greece. With estimates of EUR 100 billion having been erased from its economy, record youth unemployment and a relentless roll-out of austerity policies, the country has had a particularly rough ride in recent years. Unsurprisingly, foreign direct investment ("FDI") has suffered badly, with total FDI falling from approximately EUR 3 billion in 2008 to approximately EUR 250 million in 2010. And the country's economy continued to contract in the first quarter of 2014. Nevertheless, after six continuous years of painful recession, there may be signs that Greece is on its way to a (slow) recovery – export performance is rising, Greece is back in the debt markets, and foreign investors are starting to reconsider FDI in Greece.  

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Investing in Bosnia and Herzegovina: Success Reserved for the Bold

Investing in Bosnia and Herzegovina (BH) may be summarized in a simple but contemplative Latin proverb:fortis fortuna adiuvat – i.e. fortune favors the bold. We suppose Cicero did not have BH in mind when leaving this written treasure in the legacy of Humanity. However, given the country’s current investment climate, there is no better way to describe it in fewer words.   

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Top 4 Challenges for M&A Deals in Belarus

Experience has proven that in the majority of cases foreign investors who are planning to do M&A deals in Belarus do not pay serious attention to the procedural aspects of the process and potential legal problems that may arise. Thus, we have tried to create a summary of the 4 most common challenges faced by foreign companies when acquiring assets in Belarus, and to recommend ways to avoid or overcome them.  

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Poland: An Ever-Improving Climate for Investors

Poland continues to be on top of the list of the most attractive locations for foreign investors. In Bloomberg's "Best Countries for Business 2013" ranking, Poland scored  highest among all Central and Eastern Europe countries and ranked 20th worldwide, among 161 nations analyzed in the ranking. Poland's economy is one of the largest in the EU – and is the largest of the former communist countries of Eastern Europe. Economic forecasts for Poland are also optimistic. Real GDP growth is projected to speed up, driven by expanding exports and a gradual strengthening in domestic demand.  

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Challenges of Consortium Share Sales in Slovenia

The privatization of majority state-owned companies continues to be the primary source of M&A activity in Slovenia in 2014. However, several recent sales processes in Slovenia – most notably the Mercator sale process – have also included non-state related sellers participating in a sale consortium for the sole purpose of selling their shareholdings. Such sellers typically do not hold joint control over the target and, as far as the consortium is concerned, its members have never obtained merger clearance for acquisition of joint control over the target or published a mandatory takeover for the shares in the target. In such circumstances, any potential purchaser as well as the selling consortium are faced with several dilemmas.   

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Moldova: Snapshot of Major Regulatory Reforms Affecting M&A

This article will provide a snapshot of the major regulatory reforms in the Republic of Moldova affecting the M&A sector. Having been directly involved in assisting the Moldovan government to cope with the challenges of the reform era, our legal specialists would like to share in this brief overview just some of the actions which have influenced or will influence the M&A sector in Moldova, which is ready to start growing.  

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Bureaucratic Hurdles Sidetracking Tourism Investments in Croatia

Croatia has gained a reputation for being an overly regulated, bureaucratic, and non-investor- friendly market. The steady decline of foreign direct investments is often cited as being the result of this perception. However, with some recently enacted legislative changes, the long process of removing barriers has hopefully started and will reverse this trend.  

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The Problematic Nature of the Albanian Share Registration Center

In Albania commercial companies are most commonly incorporated under the form of limited liability companies or joint stock companies, and supervised companies such as banks, non-banking financial institutions, and insurance and reinsurance companies must be incorporated as joint stock companies. In practice a large number of significant companies — in terms of turnover, number of employed employees, carried-out projects, etc. — are established as joint stock companies as well, including a significant number of companies controlled by foreign investors.  

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Why Hungary is Such a Challenging Market for Foreign Investors

The financial services sector in Hungary has been fairly active in recent years. The entire Hungarian banking sector seems to be in a state of flux, mostly due to the various steps taken by the Hungarian government in an attempt to counter the effects of the global financial crisis and to the Hungarian-specific problem of widespread foreign currency-based lending arrangements. Although approximately 70% of the Hungarian banking market is foreign-owned, the government has clearly stated its intention to decrease this proportion to 50%.  

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Austria: Specific Liability Issues in Distressed M&A Deals

When it comes to distressed M&A transactions, the Austrian market – like many other markets in the region – has increased in recent years, both in terms of volume and the number of deals being done. Not surprisingly, time is key, and transaction documents are usually prepared, negotiated, and signed within a very short period of time. Due diligence (of the legal kind) is limited to what is feasible given the tight deadline. The liability regime in Austria is perhaps particularly complex, and investors should be aware of the various options and challenges to ensure that the transaction will be carried out successfully.  

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