Trade Legislation of Russia - Assignment Example

Trade Legislation of Russia The legal trade legislation of Russia sates that foreign investors can be foreign or legal persona, foreign citizen, Russian citizens residing abroad, foreign states and international organizations. It also states that all kinds of material assets and intellectual property invested by foreign investors for the purpose of profit can be used as property for foreign investments. Russia allows foreign investments in the form of wholly owned subsidiaries, acquisition of assets, participation in joint ventures, acquisition of land and natural resources and property and other activities not prohibited by the Russian legislation. Enterprises with foreign equity participation (joint ventures) as well as their subsidiaries and branches; Enterprises wholly owned by foreign investors as well as their subsidiaries and branches and Branches of foreign legal entities are all allowed to invest in Russia, Business is allowed to take the form of sole proprietorship or an enterprise in any other case businesses are required to create a foundation agreement which defines the nature of the relationship and the roles of the participants. http://www.fipc.ru/fipc/investment.ru/legislation/legislation.html PEST Analysis PEST Analysis of Hungary Republic of Hungary is a Central European country bordered by Ukraine, Romania, Austria, Serbia, Slovenia, Slovakia and Serbia. Its capital is Budapest and has a population of approximately 10 million. Its currency is the Forint with and exchange rate of 269.43 Hungarian forint equal to one Euro. Political Situation in Hungary The government type in Hungary is Republican. The resignation of the Hungarian prime minister earlier this year caused uncertainty in the political situation of the country. The president is the head of state and the prime minister heads the governments. There is a National Assembly which makes up the legislative set up and they Supreme and Constitutional court which make up the judicial system. The county offers low tax rates for foreign investors encouraging foreign investors by promoting an investor friendly environment http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2009-03-23.html Economy of Hungary Hungary was also affected by the global economic crisis and the country's debt levels have been on the rise. The country also faced a decline in the foreign investors. And the government securities became an issue of concern for its ability to meet finance requirements. The government has ensured liquidity of the financial markets and introduced a financial stabilization package with the IMF and EU to enhance investor confidence. The GDP declined in 2009 to -6.7 percent. The European Union revised the projections of decline and agreed to raise the deficit target of the country to 3.9 percent. The Hungarian Debt Management agency has been successful in launching bond auctions in 2009. A series of reforms by the government have been introduced to cut down on spending and to reduce the tax burden on labor in an attempt to encourage employment and to deal with the recession. The tax burden has been shifted from labor to wealth consumption. http://www.state.gov/r/pa/ei/bgn/26566.htm#political http://www.un.org/esa/agenda21/natlinfo/countr/hungary/social.htm Technology in Hungary The technology scenario in Hungary is focused on research and development. Both technology and telecommunications sector has experienced massive growth over the past few years. General Electrics, Hewlett Packard, Motorola, Nokia have established research and development centers in the country. Competition will be tough with competitors such as Eriksson, Nokia and Motorola already in the market but the company will be able to sustain through on going innovation and efficiency, and by keeping the company aggressive against competition. http://news.bbc.co.uk/2/hi/business/3662785.stm PEST for Turkey Turkey is situated in the Southeast region of Europe. The country is bordered by Greece, Iran, Iraq, Armenia, Syria and the Mediterranean Sea. It covers an area of 783, 560 square kilometers and holds a population of approximately 75 million. Its currency is the Turkish Lira which is equivalent to 0.4524 Euros. Political Situation in Turkey Both the United Stated and Britain have a strong influence over the Turkish political scene. The Turkish authority is distributed among the National Security Council controlled by the military and has a civilian president, prime minister and other ministers. The second authority organ is the parliamentary government which is selected through elections. The two bodies are in a competition for control. Differences between the two have given rise to political instability in the country. This effect paired with the influence of Britain on the National Security council and the Americans on the government are known to regularly initiate government crisis in Turkey. http://www.turks.us/article.phpstory=20031003201905610 Technology in Turkey Turkey is lagging behind in technology. Over the past few years there has been some investment in research and development but there are many areas which still need to be developed in comparison to other counties in Europe. The main technological emphasis in Turkey is on the agricultural and industrial area. There have however, been significant changes brought about Social Situation in Turkey The population of Turkey consists mostly of cosmopolitan centers, farmers, villages and coastlines. 70 percent of the country's population lives in urban areas and have lifestyles which reflect both the West and the traditional ways of life. Almost 99 percent of the country's population is Muslim and there is a presence of ethnic groups such as Kurdish in the region. Economy of Turkey Turkey is classified as a middle income country. Despite its large size it has limited natural resources. The economy relies on agriculture and heavy industries. The country has also developed a large globalize services sector. The country has witnesses a booming economic growth with declined levels of debt and higher level of GDP at 38.5 percent. The country has attracted $22.3 billion worth of foreign investment and is expected to attract and additional $12 million in the next year. The stable economy and growth of the banking, telecom and retail industry have encouraged foreign investments. Turkey has a high taxation rate which raises issues for foreign investors. http://www.state.gov/r/pa/ei/bgn/3432.htm Comparison of the PEST Analysis An analysis of both countries reveals that the political situation is more stable in Hungary as compared to Turkey which has seen on going government crisis in the past. Hungary has a relatively stable political scenario. The Hungarian economy has suffered blows as a result of the current global recession and the financial crisis. However, the Hungarian legislation favors foreign investor with its trade environment and low tax rates for foreign investors. Turkey on the other hand as a stable and growing economy which has welcomed much foreign investment but foreign investments in the region have to face high tax rates than those in Hungary. Turkey lacks considerably in the area of technology as compared to Hungary. The country has considered investments in research and development but is not as strong technologically. Hungary on the other hand is becoming the center of research and development, and many of the competitors are already present in the region. This situation provides both threats and opportunities for siemens. Siemens could enter Hungary, and participate in the competition or enter Turkey and establish itself there ahead of competition. Read More