Exam 18: Takings and National Controls on Foreign Direct Investment

Incontrovertibility risk may hinder a U.S.investor in a foreign country from trading the foreign currency back into U.S.dollars.

In order to maintain operational control over a joint venture,the foreign partner may enter into which of the following:

In order to avoid double taxation on the income of foreign subsidiary companies,U.S.tax law:

Under the modern traditional theory,the sovereign may nationalize foreign-owned property only where:

The first alternative for a victim of nationalization would be to seek relief in the courts of the country where the property was nationalized.

OPIC insurance does not provide coverage against the loss of assets by U.S.firms in the case of the nationalization of farms or factories held in a foreign country.

The precise shape of the structure to be pursued by a U.S.active investor - branch,subsidiary,etc.- in a foreign country depends largely on the tax treatment of the host country and U.S.laws.In many cases:

The difficulties associated with private political risk insurance include all of the following except:

When private property is seized gradually by a foreign government,it is known as:

Write a treaty provision regarding the taxation of e-commerce.

Even if an investor proposes to bring a desired industry to a soft-currency nation,it will generally not be possible to get currency exchange rights (preferential access to hard currency).

A U.S. enterprise that wishes to establish an entity abroad under its control may create a subsidiary or branch: I. Once either of these is established, the company may waive Rights of Protection under the U.S. bilateral investment protection agreements. II. If the company chooses a subsidiary, it will not be directly answerable for liability.

Compare and contrast the traditional and modern traditional theory of takings.

Under the laws of most legal systems,governments do not have the authority to take private property for public use.

One tax issue that presents no problem for a U.S.investor is the question of crediting taxes it has paid to a foreign country against taxes it would have to pay the U.S.on its federal return.

A foreign investor may enter into a joint venture by combining with a national of a host country to create a new entity or by acquiring a portion of an existing local entity.

Once a foreign firm creates a subsidiary abroad under its control,it risks waiving its protection under bilateral investment treaties.

Compare and contrast different types of passive investments and the risks and benefits associated with each.

Under the Foreign Sovereign Immunities Act,a federal court would not have jurisdiction over a foreign nation unless:

Passive investment in less-developed countries is similar to other developed countries since equity shares are easily transferable worldwide.