presentation design example pharma fdi
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B U S 6 3 8 - 1 1 0 3 A - 0 1 U N I T 3 G R O U P P R O J E C T- - - - - -
E R I C B R A AT Z- - - - - -- - - - - -- - - - - -A I U
D R . J E F F R E Y VA N D E TTA8 / 7 / 2 0 1 1
Pharma Heal Corporation:FDI Environment, Regulation, & Challenges in Target Countries
IntroductionThe Challenges of
Competition and Regulation
• Regulatory environment comprises• Formal Factors
• Written Policies & Laws• Informal /Unwritten Policies
• Operational Investment Code
Pharma Heal Corp. faces strong competition in the target countries• Mexico• India• Thailand• Albania• Zimbabwe
Mexico
Mexico is open to foreign direct investment
The 1993 Foreign Investment Law is the basic statute Foreign Investment Law
Mexico has open conversion and transfer policies Based on NAFTA
Automated clearinghouse for cross-border financial transactions Established by U.S. Fed &
Bank of Mexico
Expropriation and Compensation
Dispute settlement
No expropriation of property under NAFTA
Expropriations are governed by international law
Investors have the right to international arbitration under NAFTA
NAFTA provision for settlement of investment disputes
UNCITRAL rules Mexican government &
courts recognize and enforce arbitral awards
Mexico (cont.)
Mexico (cont.)
Export requirements limited
Flat rate corporate tax Most taxes are federal
IMMEX exempts companies import duties and VAT taxes on inputs and
components on exported
manufactured goods
India
In the world’s top five destinations for foreign investment.
Its currency is fully convertible for current account transactions to the USD and other
currencies around the world.
India (cont.)
Investors have the rights to own and establish businesses with restrictions in some sectors.
India’s regulatory system is questionable as investors often complain of lack of transparency in the system.
Expropriation is not a common occurrence in India and where it happened compensation was paid.
Thailand
Restrictions on FDI Alien Business Law
(ABL)Treaty of Amity and
Economic Relations Exemptions for
American companies Attracting FDI Targeted assistance
programs Tax incentives Import duty
exemptions Support Services
Thailand (cont.)
Strong investment environment
Incentives for high-tech industry PHC research &
development opportunityU.S.-Thailand Treaty of
Amity and Economic Relations (AER)
Albania
Foreign and domestic investors are subject to the same treatment
FDI encouragedALBINVEST
Incentives Information
Equal property and real estate ownership rights for foreign investors
Albania (cont.)
Laws to protect property rights of both foreign and domestic investors
Slow and inefficient legal system affects settlement of disputes
Expropriation is rare except for land when done for public
use as required by law.
Compensation available as Restitution Compensation with property
of similar value in a different location
Cash settlement/financial compensation.
Zimbabwe
• Defensive toward foreign investors.
• Tax and tariff exemptions and incentives.
• Repatriation of earnings is problematic• Conversion
difficulties• Depreciating local
currency. • Very little transparency
within its organizations and regulations
Zimbabwe (cont.)
Reserve Bank of Zimbabwe must license all financial
institutions responsible for banking
regulations.
Aggregation allows for firms to be
viewed as a separate entity from its holding company.
Current economic climate may hinder PHC objectives severe socio-economic
hardship political instability
Political alliances important
Prior clearance from Zimbabwe Investment Authority
Seeing the Big Picture
A complete FDI Strategy includes Formal investment code Operational investment
codeHolistic understanding
of each country’s Unique government
structure Allocations of power Nuances of legal system
Conclusion
References
Albanian American Trade Development Association (2002). Doing business in Albania. Retrieved from http://www.albaniabiz.org/business/index2.html
Avert (n.d.). Worldwide HIV & AIDS Statistics Commentary. Retrieved from http://www.avert.org/worlstatinfo.htm Bureau for Economic, Energy and Business Affairs (2011). 2010 Investment climate statement – Albania. Retrieved from
http://www.state.gov/e/eeb/rls/othr/ics/2010/138024.htm Ernst & Young Global Limited (n.d.). Eye on Africa. Retrieved from
http://www.ey.com/Publication/vwLUAssets/Eye_on_Africa_-_Volume_one/ Export Finance & Insurance Corporation (2010) Thailand: Overview. Retrieved from
http://www.efic.gov.au/country/countryprofiles/Pages/thailand.aspx Export.gov (2011). Thailand Market Profile. http://export.gov/thailand/doingbusinessinthailand/index.asp LonZim (n.d.). Risks Relating to investing in Zimbabwe. Retrieved from
www.lonzim.co.uk/Doc/RisksRelatingtoInvestinginZimbabwe.pdf Massachusetts Mexico Office (n.d.). Mexican pharmaceutical industry. Retrieved from http://www.moiti.org/pdf/Mexican
%20Pharmaceutical%20Industry.pdf Mexico's Economy (2011, May 23). Foreign direct investment into Mexico is up well above average. Retrieved from
http://www.mexico.vg/mexicos-economy/foreign-direct-investment-into-mexico/4679 Thailand Board of Investment (2010). Thailand's advantages. Retrieved from
http://www.boi.go.th/english/why/thailand_advantages.asp Thailand. Making a Difference for Entrepreneurs (n.d.) Retrieved from http://www.doingbusiness.org/~/media/FPDKM/Doing
%20Business/Documents/Profiles/Country/DB11/THA.pdf U.S. Bureau (2009). Bureau of Labor Statistics. Manufacturing (NAICS 31-33). Retrieved from
ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/aemexico.txt U.S. Commercial Services (2011). Doing business in Mexico: 2010 country commercial guide for U.S. companies. Retrieved
from http://www.nccommerce.com/Portals/5/Documents/MexicoCountryCommercialGuide2010.pdf U.S. Department of Commerce (2004). Pharmaceutical price controls in OECD countries: Implications for U.S. consumers,
pricing, research and development, and innovation. Retrieved from http://www.trade.gov/td/health/DrugPricingStudy.pdf U.S. Department of State (2011.). Background note: Thailand. Retrieved from http://www.state.gov/r/pa/ei/bgn/2814.htm Wikipedia (2011). BRIC. Retrieved from http://en.wikipedia.org/wiki/BRIC Zimbwa, C. (2005). An empirical assessment of corporate transparency in Zimbabwe. Retrieved from
http://eprints.bournemouth.ac.uk/3147/1/424.pdf