Doing Business In... 2022

Doing Business In... 2022 – Global Overview

The fourth edition of Chambers Global Practice Guides: Doing Business In... is issued while the world's economy is facing many uncertainties.

The direct effects of the COVID-19 pandemic have now faded, although not entirely. Restrictions to travel to certain countries remain, and China recently confined entire cities, provoking a shortage of materials on the global markets. Despite all the chaos the world experienced in the past two years, 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 an overall increase in economic growth for 2021 of 5.7%, although the pace of the recovery may substantially differ in the various regions of the world.

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. While the current political mood seems to be more favourable to international trade than it was a few years ago, there are still supply chain disruptions affecting certain manufacturing industries and the costs and time to ship goods across the world are still quite high.

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.

Unfortunately, the recovery from the pandemic has now given way to a new panorama: the war in Ukraine, high inflation, rising interest rates and a risk of shortage of oil, gas and certain agricultural products.

The World Bank estimates that global growth will slump from 5.7% in 2021 to 2.9% in 2022.

Despite all these hurdles, people, companies and markets continue to remain highly interconnected. 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.

Since then, new priorities and policies emerged. 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 their response based on their own situation and resources.

There is no doubt that the legal framework in many countries is in the process of undergoing changes. 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 2022 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.