LEGAL ASPECTS OF INTL BUSINESS - Assignment Example

Legal Aspects of International Business Significance of foreign investment policies Foreign investment policies regulate the entry of foreign firms. It provides restrictions and conditions for foreign investors in overall or per sector. This regulation protects the infant industries and small firms of the host country. Foreign investment policies allow for the growth of local countries. For instance, policies on tax may introduce tax cuts on local companies only. These policies also boost the sovereignty of the host county so that the country’s population gets a significant control over its own economy (Mitra and Panagariya, 2004).

Such policies also promote domestic development and protect balance of payment.Criteria for evaluating a foreign investment proposal Some of the criteria for evaluating foreign investment proposal include: conformity of the document package with the requirements provided, conformity of the investment project and the priorities of the host country, ability to contribute to positive effect on the economy, conformity of the project to internationally accepted definition of investment project, and the quality of investment project.

Different types of free zone The types of free zone include the Free Trade Zone, the Free Port, and the Processing Export Zone (EPZ). A Free Trade Zone is a geographical area where trade flows are permitted and unrestricted. A Free Port is a Free Zone that is specifically linked to a seaport or airport (The Meneren Corporation 2005). Export Processing Zone is an area in which foreign firms produce goods for export and receive special incentives.Bonded Warehouse A bonded is a restricted building or secured area where goods may be stored, manufactured, and transformed free of duty.

The ownership rights of such areas or building may be possessed by the state or private enterprise. Once the goods enter the warehouse, the importer and the owner of the warehouse incur liability under a bond.Works citedMitra, Devashish, and Arvind Panagariya. The Political Economy of Trade, Aid and Foreign Investment Policies. Boston: Elsevier, 2004. Internet resource. The Meneren Corporation. Introduction to International Free Zones. Denver, Colorado: The Meneren Corporation. 2005. Web.