The Law Risks And Solutions To China Enterprises' Overseas Direct Investment

The law risk has become the main barrier for china enterprises'overseas direct investment. According to the research, the law risks enterprises suffering from in the entering process accounts for 20% in the whole acquisition process, while the other 80% exists in the following operation process. Suffering from law risks in the overseas investment can result in great losses to the enterprises, may lead to disappear of the stated-owned assets and bankruptcy of the enterprises. However, our country and enterprises have not paid enough attention to the law risks. According to the analysis report of the 100 greatest enterprises'law risk environment released by Luwei attorney office in Marth,2005, there exists obvious shortage of investment in preventing law risks for china's enterprises. Therefore, the research of law risks in the overseas direct investment process and its components and embodiments and the feasible measures preventing from them is good for enhancing enterprises'awareness of preventing law risks, improving their ability of dealing with law risks in the multinational acquisition, increasing the success rate of multinational operation and better implement for our country's Going Outside strategy.The paper includes four parts. The first part introduces the research background, the research status quo both in home and aboard and the meaning of this research.The second part mainly introduces the meanings and types of the law risks and the law risks in the overseas direct investment. On the basis of other authors' research, this paper definite the law risks in the overseas investment in three elements, those are, defects of the examination and approval system of mother country's overseas direct investment law, the shortage of law in the host country and the discrimination in the implementing process, the low law awareness of the enterprises and the defects of company operation system.The third part shows the main specific law risks in the process of the overseas direct investment. The depiction of the law risks goes by the logic of entering process to the operational process. As to the entering process, we mainly discuss the establishment styles and the choice of the industries. Because more and more china enterprises involves in the multinational acquisition in the recent years and they met much more law risks in this investment style, so this paper also discuss the main law risks resulting from that. In the operation process, the law risks enterprises meet are many and complex, including law risks in the labor, environment, contract, intellectual property and taxes.The third part simply discusses the effect and harm of the overseas direct investment law risks on the basis of the second and the third part. And then make some suggestions and measures from both sides of the country and the enterprise.The invention of this paper has two points. First of all, it analyses the law risks in two aspects, theory and realism. It not only introduces the academia conclusion and understanding to the law risks, but also shows their specific representation in the realism, trying to identify them by vivid examples which makes the analysis more accountable and real. Secondly, this analysis of the law risks goes by the logic of entering process to the operation process which makes the expatiation more rich and complete.Of course, this paper also has some defects. Firstly, though it analyses many types of law risks the enterprises may meet, the reality is that the law risks are much more complex than we can imagine, then there must exist some missing points. Secondly, the analysis of the law risks involves many fields, such as, the economics, management, finance and law. The limitation of my knowledge may make the analysis superficial and lack of deep discussion and research.