A Comparative Analysis of Business Law Regulations on Foreign Investment

Introduction

One of the defining features if our current geopolitical moment is increased global interdependence. Across the globe, currently we have been witnessing unprecedented levels of cross border economic, financial and business integration and capital interdependence within both the developing and developed states. India and China are among those countries that have over the years maintained above-average growth of the economy even as others went through economic contraction1. The investment regime of India only places limited re strictions on foreign investment activities, including the hostile takeovers of Indian companies. Even with that, the country also maintains a complex set of licensing requirements and restrictions which have over the years affected the abilities of Indian companies of attracting foreign capital. On the other hand, China still maintains a complex investment regime that combines takeover law restrictions and complicated securities law with regulatory approval requirements that are contradictory and that are often overseen by different Chinese agencies. We seek to identify some of the similari ties and differences between the business law regulations on foreign investment of India and China, offers the best insights into business dissertation help.

Discussion

The implementation and regulation of different policies and laws that are related to businesses in different economic sectors is of paramount importance for securing the prosperity and development that is desired and sustainability too. For such purposes, India has different business law regulation acts. Some of the most significant acts include; the New Companies Act, 2013, Industrial Disputes ACT, 1947, Factories Act, 1948, Mines Act, 1952, Income Tax Act, 1961, Reserve Bank of India Act, 1952, among others.

Over the years, starting up of new businesses has been made easier in India and there exist different entry points that can be used by foreign investors who have the intentions of venturing there. These are Private Limited Company, Limited Liability Company, Branch Office, and Representative Office among others3. Once a company has been incorporated it now becomes capable of opening bank accounts for those foreign equities venturing into India. It is possible to form companies either through limited or unlimited liability in India. It is observed that most preference is given to limited liability companies whereby, personal liability is limited by predetermined amounts or to the amounts unpaid on shares. The law in India allows, foreigners to either become partners or full time directors in these entities. However, it is further required that one of the partners must be an Indian resident.

On the other hand, China has also been making giant strides to improve the access to its local markets by foreigners. In October, 2019, China announced the removal of foreign ownership limits in major parts of the financial industry.