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Country Risk - Assignment Example

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Operating a business in a foreign country could be open up better business opportunities but there are many challenges the business operators should overcome in order to turn the available opportunities into business revenue. The report provides an analysis of investment…
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Country Risk
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Download file to see previous pages ous risks examined include the political risks such as tax legislation, risk due to foreign exchange rate variations, inflation rate, interest’s rates, etc. When business extends its operations to foreign countries it has to comply with regulations of the host country as well as those of the mother country. The report examines general business environment in UK and Malaysia in order to decide the best source of business funding and understand the prevailing challenges that Zeus PLC is likely to face during its operations. The company will contribute to growth of UK and Malaysia economies through creation of employment opportunities, generating revenue, etc. Its operations will be influenced by the labour laws of the two countries. In order to minimize the cost of operations the company should set its operation as branch in foreign country and use the local currency to pay its workers in order to reduce effects of currency exchange on cost of labour.
Malaysia is a mixed economy in which both private and public sectors are actively involved in business, and the country provides an enabling business environment for both domestic and foreign companies. “The services industry including business services (wholesale and retail), financial transport, communication and real estate subsectors contributes 58.6% of the economic Gross Domestic Products (GDP) as of 2011” (Ibp Inc. 2014. P. 124). Manufacturing sector is the second (contributing 27.5%) while agriculture and mining industry takes third and fourth positions with 7.3% and 6.3% respectively (Export.gov. 2014). However, existence of "tight fiscal policies, nonaggressive consumers, and restrained global growth" services is likely to limit the economic growth in UK (PwC. 2014). The government aims to "promote foreign investments through by deregulating Foreign Investment Committee’s investment procedures” (Dana, Mahdi, Zin, Ramli, Nor, & Mohd, 2013. P. 11). The report examines general business environment in ...Download file to see next pagesRead More
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