Foreign Direct Investment in Retailing in India â?? Its Emergence & Prospects
Posted on 10. Mar, 2010 by admin in general
Abstract
In recent years the destination sectors in FDI have became more varied. FDI inflows have shifted from infrastructure, natural resources and export driven manufacturing to other areas such as retailing, tourism, construction and off shore services. A World Bank study showed that cumulative FDI inflows to the retail sector in the 20 largest developing countries amounted to US$ 45 billion in 1998-2002 (about 7 per cent of the total of these countries). The study showed that after liberalization; countries such as Brazil, Poland and Thailand have received significant FDI in retailing.
In spite of the recent developments in retailing and its immense contribution to the economy, retailing continues to be are the least evolved industries and the growth of organised retailing in India has been much slower as compared to rest of the world. Over a period of 10 years, the show of organised retailing in total retailing has grown from 10 per cent to 40 percent in Brazil and 20 percent in China, while in India it is only 2 per cent (between 1995-2005). One important reason for this is that retailing is one of the few sectors where foreign direct investment is not allowed. Within the country, there have been protests by trading associations and other stakeholders against allowing FDI in retailing. On the other hand, the growing market has attracted foreign investors and India has been portrayed as an important investment destination for the global retail chains. The present paper attempts to analyze the reason why foreign retailers are interested in India, the strategies they are adopting to enter India and there prospects in India
After the waves of globalisation, liberalisation and privatisation marketing scenario particularly retailing has changed radically. These changes have resulted in emergence of new environment for buyers’ behaviour and purchasing habits. The upper and upper middle strata of the society now prefers to purchase well established branded goods from standard showrooms and it has transformed the entire picture and perception not only in the metro cities but almost in all big cities of our country. It is worth mentioning that retailing in India has been hailed as one of the sun-rise sectors in the economy. According to A. T. Kearney, a well known International Management Consultant, “India is the second most attractive retail designation globally, among thirty emergent markets.” Till now unorganised retailing sector was dominating retail trade in India by constituting 98% of all retailing trade but now not only traditional Indian retailers but giant Indian retailers like Reliance has entered in the area and is planning to expand its activities in this sector in a big wag. Even world renowned retailing organisation like Wal-Mart has decided to enter in India via joint venture with Bharti and French retailer Carrefour is busy in chalking out strategy to enter the hyper market and supermarket retail format in India through Dubai based retail major Landmark group.
In this context an effort has been made in this paper to review the emergence of global retailers in India, to examine the govt. policy relating to FDI in retailing and to evaluate the prospects of global retailing in India.
Why Global Retailers are Interested in India?
More specifically the global players are interested in India due to following reasons:
I) Strategic Location & Geography: India enjoys unique geographical advantage. It is strategically located in Asia with access to all leading markets of the World. With total area of 32, 87,590 Sq. Km, Coastline of 7000 Km and borders with six countries India becomes most promising destination for the foreign direct investment.
II) Versatile Demographics: Demographically with a population of more than 1.1 billion and diverse culture, India is a land of all seasons. India presents a real cosmopolitan population with diverse religions and culture. Hinduism, Buddhism, Jainism, Sikhism, Christianity and Islam are the main religions of India. This variety of religions provides India with a diverse culture. Besides, India has versatile population of urban and rural nature. This versatility of population makes India a ready made market for foreign retailers.
III) Vast growing Economy: On economic front, India the largest democracy of the world, have a stable Govt. with robust programme of economic reforms. India with a foreign exchange reserve of more than US $120 billion, FDI of more than US $9.9 billion ,average GDP growth of more than 7% per annum, rupee appreciation Vs U.S dollar of more than 2% in last two years and with a rapidly growing investment in infrastructure has all the ingredients of a emerging economic super power. India is tipped to be third largest economy in terms of GDP by the year 2050 (Table 1)
Table 1: Forecast of GDP ($ Trillion)
Country
2010
2050
China
3.0
44.5
U.S.A
13.3
35.2
India
0.9
27.8
Japan
4.6
6.7
Brazil
0.7
6.1
Russia
0.8
5.9
U.K.
1.9
3.8
Germany
2.2
3.6
Italy
1.3
2.1
Source: McKinsey Quarterly Nov.04
In such a scenario every multinational aims to set up a base in India, not to participate in Indian growth story, rather to build their own future.
IV) Retailing: The Emerging Revolution: Retailing is the largest private industry in India and second largest employer after agriculture. The sector contributes to around 10 percent of GDP. With over 12 million retail outlets, India has the highest retail outlets density in the world. This sector witnessed significant development in the past 10 years from small unorganized family owned retail formats to organized retailing. Liberalization of the economy, rise in per capita income and growing consumerism has encouraged large business and venture capitalist in investing in retail infrastructure. The importance of retail sector in India can be judged from following facts (a) Retail sector is the largest contributor to the Indian GDP (b) The retail Sector provides 15% employment (c) India has world largest retail network with 12 million outlets (d) Total market size of retailing in India Is U.S $ 180 billion (e) Current Share of Organized Retailing is just 2% which comes around to $3.6 trillion (f) Organized retail sector is growing @ 28% per annum.
V) Indian Retailing: Opportunities Unexplored: India is sometimes referred to as the nation of shopkeepers. This is because the country has the highest density of retail outlets – over 12 million. However, unlike most developed and developing countries, Indian retail sector is highly fragmented and bulk of the business is in the unorganized sector. As compared to China (Table 2) the presence of global players in India is very less
Table 2: Number of Foreign Retailers in India & China
Retailer
China
India
Wal- Mart
40
——–
Carrefour
53
———
Tesco
30
———–
Metro
21
02
KFC
Over 1000
04
Starbucks
70
——
McDonald’s
580
47
Pizza Hut
110
75
Louis Vuitton
06
2
Prada
10
——–
B&Q
20
——-
Hugo Boss
60
02
Source: McKinsey Quarterly Nov.04
India in such a scenario presents following facts to foreign retailers:
In addition to the above, improved living standards and continuing economic growth, friendly business environment, growing spending power and increasing number of conscious customers aspiring to own quality and branded products in India are also attracting to global retailers to enter in Indian market.
Major Global Players in Retailing: The top 30 global retailers together with their percentage of sale from grocery and the percentage of sales in domestic and foreign markets for the year 2003 are given in Table 3.
Table 3: Top 30 Global Retailers with their Sales in Grocery and Percentage
Share of Domestic and Foreign sales in Total Retail Sales, 2003
Company
Country of Origin
Net Sales 2003 (USD mn)
Grocery Sales (%)
Domestic Sales(%)
Foreign Sales(%)
Wal-Mart
USA
256,329
43.7
79.1
20.9
Carrefour
France
79,609
77.4
50.7
49.3
Ahold
Neth.
63,325
84.0
15.8
84.2
Metro Group
Germany
60,532
50.5
52.9
47.1
Kroger
USA
53,791
70.2
100.0
0.0
Tesco
UK
50,326
74.6
80.1
19.9
Target
48,163
17.8
100.00
0.0
Rewe
44,251
7.6
71.4
28.6
Aldi
41,011
83.6
63.0
37.0
ITM(Intermarche)
37,723
77.3
72.2
27.8
Safeway(USA)
35,552
75.5
85.3
14.7
Schwarz Group
33,357
83.0
66.2
33.8
Schwarz Group
33,357
83.0
66.2
33.8
Walagreens
32,505
380
100.00
0.0
Auchan
32,422
57.2
57.5
42.5
AEON
30,574
47.2
91.7
8.3
Ito-Yokado
30,541
62.5
73.8
26.2
Edeka
29,670
83.8
91.2
8.8
Sainsbury
27,995
73.3
85.1
14.9
Tengelmann
27,721
69.7
49.1
50.9
Leclerc
27,332
59.9
95.7
4.3
CVS
26,588
31.2
100.0
0.0
Casino
25,958
73.3
58.9
41.1
Kmart
23,253
14.0
100.0
0.0
Delhaize Group
21,256
77.1
20.1
79.9
Loblaw
18,002
77.5
100.0
0.0
JC Penney
17,786
16.9
99.4
0.6
Coles Myer
17,523
58.5
99.4
0.6
Daiei
17,158
43.3
98.9
1.1
1,287,382
2,612,618
3,900,000
Source: Extracted from M+M Planet Retail
Arguments in favour of FDI in Retailing
FDI in retailing is favoured on following grounds:
(1) The global retailers have advanced management know how in merchandising and inventory management and have adopted new technologies which can significantly improve productivity and efficiency in retailing. (2) Entry of large low-cost retailers and adoption of integrated supply chain management by them is likely to lower down the prices. (3) FDI in retailing can easily assure the quality of product, better shopping experience and customer services. (4) They promote the linkage of local suppliers, farmers and manufacturers, no doubt only those who can meet the quality and safety standards, to global market and this will ensure a reliable and profitable market to these local players. (5) As multinational players are spreading their operation, regional players are also developing their supply chain differentiating their strategies and improving their operations to counter the size of international players. This all will encourage the investment and employment in supply chain management. (6) Joint ventures would ease capital constraints of existing organised retailers and (7) FDI would lead to development of different retail formats and modernisation of the sector.
Arguments against FDI in Retailing
Many trading associations, political parties and industrial associations have argued against FDI in retailing due to following reasons:
(1) Indian retailers have yet to consolidate their position. The existing retailing scenario is characterized by the presence of a large number of fragmented family owned businesses, who would not be able to survive the competition from global players.
(2) The examples of south east Asian countries show that after allowing FDI, the domestic retailers were marginalised and this led to unemployment.
(3) FDI in retailing can upset the import balance, as large international retailers may prefer to source majority of their products globally rather than investing in local products.
(4) Global retailers might resort to predatory pricing. Due to their financial clout, they often sell below cost in the new markets. Once the domestic players are wiped out of the market foreign players enjoy a monopoly position which allows them to increase prices and earn profits.
(5) Indian retailers have argued that since lending rates are much higher in India, Indian retailers, especially small retailers, are at a disadvantageous position compared to foreign retailers who have access to International funds at lower interest rates. High cost of borrowing forces the domestic players to charge higher prices for the products.
(6) FDI in retail trade would not attract large inflows of foreign investment since very little investment is required to conduct retail business. Goods are bought on credit and sales are made on cash basis. Hence, the working capital requirement is negligible. On the contrary; after making initial investment on basic infrastructure, the multinational retailers may remit the higher amount of profits earned in India to their own country.
In India, till recently, FDI was not allowed in retailing, but the Union cabinet on January 24, 2006 rationalised and simplified the FDI policy and allowed the contentious issue of foreign investment in retail sector by allowing FDI up to 51 percent with prior government approval for retail trade in single brand products. This would imply that foreign companies would be allowed to sell goods sold internationally under a single brand, viz. Reebok, Nokia, Adidas. Retailing of goods of multiple brands, even if such products are produced by same manufacturer would not be allowed. However, there are indications that the Government may allow foreign investments in retail segments where small domestic players do not operate. The Department of Industrial Policy and Promotion is preparing a detailed policy for further liberalisation of FDI in the country, which is likely to be announced before the budget 2007-08. As part of the proposed move, the Ministry has marked out sports goods, electronics and building equipment as some of the sectors that may be opened up with a 51% cap on FDI. The government is also considering to permit multi-brand retail in such areas. The government is likely to discuss the matter with the left parties before taking a final call on the issue. The Left has initially stalled the government’s plans to allow FDI in multi-brand retail on the grounds that it will adversely affect mom-and-pop stores.
It is worth mentioning that FDI restrictions have not deterred prominent international players from entering India. Many U.S and other international retailers and consumer goods companies consider India a top-priority market with the potential for breakthrough growth. In this context (a) Wal-Mart CEO, John Menzar visited India in 2005 and met with Prime Minister to discuss relevant issues. Wal-Mart’s sourcing from India, which was U.S.$300 million in 2004 reached to U.S.$1.2 billion in 2005.(b) Fashion brand DKNY is set to foray into Indian fashion industry through franchise agreement with Indian company, S. Kumar’s. (c) Tommy Hilfiger, International fashion icon says that “We are going to build a wonderful lifestyle business here” (d) Phillip Morris is ready to unveil its plans for kraft in India through Kraft Jacob Suchard (KJS) India, a wholly owned arm of Philip Morris India (e) Starbucks has expressed its interest in entering India through the franchise route.
Although before January 24, 2006 FDI was not allowed in retailing, many international players are operating in the country. Some of entry routes employed by them are discussed in details as below:
(a) Manufacturing and Local Sourcing: Companies that set up manufacturing facilities are allowed to sell the products in the domestic market. Consumer durable companies such as Sony and Samsung have entered the retail sector through this route. Due to high labour cost in their domestic market, many international brands are setting up manufacturing bases in developing countries such as India and China and / or are sourcing products from local manufacturers. For example, Levi’s and Tommy Hilfiger are sourcing products from Indian manufacturers like Arvind Mills. Benetton has a manufacturing unit in India. Other international brands like GIVO from Italy have set up export-oriented manufacturing facilities. These companies are allowed to sell products to Indian consumers through franchising, local distributors, existing Indian retailers, own outlets, etc.
(b) Franchising: Franchising is the most preferred mode through which foreign players have entered the Indian market. It is the easiest route to enter the Indian market. Franchising is often used as a mode to expand the market of a particular retail enterprise outside domestic economy since it allows firms to expand without investing their own capital, is based on local expertise and enables firms to curb local oppositions and regulations. This is the most common mode for entry of fast food chains across the world. Apart from fast food chains like Pizza Hut, players such as Lacoste, Mango, Nike and Marks and Spencer, have entered the Indian market through this route.
For setting up franchising operation, the foreign players are required to take permission from the Reserve Bank of India (RBI). RBI often imposes the condition that franchisers have to bring in foreign investment and set up a base for carrying on operational activities. A foreign franchiser not wishing to make a direct investment would have to render technical assistance to the franchisee. Some franchisee, such as Pizza Hut has made significant investment in the supply chain.
The arrangements between franchisee and franchiser are found to be extremely flexible and are based on negotiation between the two. Some Indian franchisees have complained about high franchising fees together with high real estate costs, high import duties and other costs escalate the prices. For instance, the cost of a Marks and Spencer product is higher than not only the brands produced domestically but also in comparison to the price of the product in the UK. The high prices restrict the ability of the foreign players to penetrate the market but they have entered the country to make their brands visible to the huge Indian market.
If FDI is allowed in retailing, franchisees are not very sure whether they would hold the retailing rights for the brands. According to industry representatives, since franchisees largely constitute of domestic traders (even some unorganised retailers have take up franchising rights) who have made significant investment in infrastructure, government through legislation must ensure that they do not loose out their franchising rights if FDI is allowed in retailing and the franchisers decide to change the mode of operation. The existing franchisees have also expressed an interest in entering into joint venture with the franchisers if FDI is allowed in retailing.
(c) Test Marketing: Test marketing is another route through which many foreign players have entered the Indian market. Foreign investment Promotion Board (FIPB) allows foreign companies for test marketing of their products for a two-year period by the end of which they are required to set up manufacturing facilities in India. Direct selling companies like Amway and Oriflame entered the Indian market through this route. Initially, Amway got an approval for test marketing for a period of two years but they managed to secure an extension of one more year. At the end of the third year, they set up contract manufacturing facilities and brought in foreign investment and technical know-how. Oriflame too extended its test marketing license for a third year and at the end of which had set up a manufacturing facility in Noida (UP) for producing certain specific products. Other products are imported and would continue to be imported from abroad.
Nokia came to India through the test marketing route in mid-1990s. Initially they got a license for two years to test their products in the Mumbai circle. After three months of their entry they tied up with the service providers to provide integrated services to their customers. Due to pressure from the FIPB, Nokia had tied up with the HCL Infotech as a strategic partner for all India distribution of Nokia products. After the success of its products in the country, Nokia had opened up an office but had not set up a manufacturing facility and continued to import all products (even models made specifically for India). After another two years they divided the country into four zones and entered into a strategic alliance for distribution with Supreme for East and West India while HCL continued with North and Southern zone. Nokia had also applied for the cash and carry license from the FIPB and has recently got the license. Nokia is aggressively targeting the Indian consumers and plan to capture 75 percent of the mobile market in the next seven years. The company, which currently operates as a wholesale cash-and carry, recently announced that it would set up manufacturing facilities very soon.
The test marketing route allows foreign players to test the demand for their products in Indian market before undertaking investment. Even if FDI is allowed in retailing, many foreign players would like to enter the Indian market through this route.
(d) Wholesale Cash-and-Carry Operation: This is the route through which large international retailers such as Germany’s Metro Cash & Carry GmbH and Shoprite Checkers of South Africa have entered the Indian market. The wholesale cash-and-carry operation is defined as any trading outlets where goods are sold at the wholesale rate for retailers and businesses to buy. The transactions are only for business purposes and not for personal consumption as in the case of retailing.
(e) Distributor: Companies such as Swarovski and Hugo Boss have set up distribution offices in India and these offices supply the products to local retailers. All products of Hugo Boss are imported and distributed through the company’s distributor.
(f) Special Cases: The Sri Lankan retailers have entered the India market through the initiatives of Export Development Board of Sri Lanka (EDB) which obtained special permission from the RBI to set up retail operations in India. The EDB has leased 17 retail outlets in Spencer Plaza in Chennai in which Sri Lankan retailers are showcasing and selling their products. The Sri Lankan products showcased in these stores are mostly at the higher end of the quality spectrum and can be brought into the country free of duty. This gives an advantage to large Sri Lankan retailers like Hameedia not only to establish a global presence but also to access the large customer base of India at competitive prices. The EDB is also exploring the possibilities of setting up similar trade centres in other cities like Delhi and Mumbai. Although this mode has allowed retailers from Sri Lanka to enter the Indian market without domestic manufacturing and sourcing conditions and some products sold by these traders are similar to those sold by Indian retailers, EDB did not face any opposition from Chambers, retailers and the trading houses.
Although the official policy is that FDI in retailing is allowed only in one brand and that too up to 51% in retailing, but it has not acted as an entry barrier. Foreign players have a substantial presence in the country and have used several alternative unique routes to enter Indian Trading Sector. Some of the existing foreign players are listed below in table 4.
Table 4: Some Existing Foreign Players and Prospective Entrants
Type
Status
7-Eleven
Supermarket
Evaluating
Amway
Direct selling
Already in
Auchan
Hypermarket
Evaluating
Carrefour
Multi-format retailer
Wait and watch
Dairy Farm
Multi-format retailers
Tied up with RPG
JC Penny
Product sourcing
Already in
Landmark
Department Store
Already in
Lee Cooper
Product sourcing
Already in
Levi’s
Product sourcing
Already in
Mango
Apparel retailer
Already in
Marks & Spencer
Department Store
Already in
Metro
Cash & carry
Already in
Oriflame
Direct selling
Already in
Reebok
Oint venture
Already in
Shoprite
Wholesale cash-and-carry and franchising
Already in
Sony
Manufacturer Retailer
Already in
Wal-Mart
Hypermarket
Agreement with Bharti
Source: FDI in Retail Sector, Department of consumer affairs, Government of India, p. 115.
It is evident that ever growing urban and rural markets in India represent an unprecedented and vast unexplored opportunity for retailing to all types of formats. Initially there may be certain reservations and apprehensions in allowing global players in India’s retailing but if they are allowed in a phased manner on the basis of a well conceived and chalked out policy, they are likely to lead to more investment in organized retailing and allied sectors. As already discussed, it would also lead to inflow of latest technical know how, establishment of well integrated and sophisticated supply chains, availability of standard, latest and quality products, help in up gradation of human skills and increased sourcing from India. Yet the following points may be kept into consideration in this context:
The strategy of opening up should be backed by appropriate reform measures. India can learn from the experiences of other developed and developing countries and develop its own strategies, laws and regulations that would be in the best interest of the country. As of now, there is no proper definition of retailing or retail formats in India. International players are exploiting the situation and are often entering the market and expanding their businesses through multiple routes and are operating in the country with more than one format of retailing. The regulatory regime should address these issues. The entry norms should clearly state the approval requirements, conditions / restrictions if any imposed, etc. The government should also strictly enforce the quality standards for local production and imports.
Objectives of Leadership in Energy and Environmental Design
Posted on 10. Mar, 2010 by admin in general
Leadership in energy and environmental design (LEED) has been developed by Green Building Council US for designing environmentally sustainable construction. Over 1400 projects in 30 states of United States have been developed by LEED. Objectives of Leadership in energy and environmental design;LEED was created to accomplish the following objectives:1. To define green building by establishing standards of measurement.2. Promoting integrated design practices.3. Recognizing environmental leadership in building industry.4. To increase the awareness among customers by specifying the benefits of green building.The above are the main objectives of LEED. LEED is recommended for six particular areas like sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environment quality and innovative design process.LEED is incorporated for various projects ranging from new buildings to existing buildings. LEED is popular in green building industry in United States. LEED certified buildings are divided normally into 4 categories. They are LEED basic certified buildings, LEED platinum certified buildings, LEED gold certified buildings, and LEED silver certified buildings.LEED standards in Canada provide certification to the builders that they have demonstrated sustainability by meeting the standards in environment and energy efficiency. This certification will help in identifying the development projects that protect and improve the overall health and natural environment. This will help in improving the quality of life in the society. Leadership in energy and environment design for homes;LEED for homes is a voluntary certification process. This process aims at providing environmentally sustainable and efficient homes. Construction of high performance green homes is possible with LEED.LEED is helpful to real estate professionals, architects, facility managers, construction managers, government officials and so on. State and local government uses LEED for public owned and public funded buildings. LEED projects are used in more than 30 states in US and in 40 other countries including Mexico, India Brazil, and Canada,.Leed for schools recognizes the unique designs for schools. It also addresses class room acoustics, master planning, mold prevention etc. Green schools are possible with LEED. This is healthy for students and teachers. This will provide excellent learning environment for students. The green school allows fresh air everywhere. This will nurture school children to get a healthy atmosphere. LEED for school is also recommended for early education, day care centers and so on. However it is not compulsory. You must remember that LEED for schools are cost effective and beneficial to teachers and students.LEED is a voluntary standard to support green building design. If you want, you can read the details about LEED in LEED Rating system page. You can also get information about certification from LEED in the web. You can also use LEED logo if you wish by submitting usage certification request. You can get certification according to the type of the building. You can get registration information in the registration fee page of LEED rating system. LEED online helps you to get documentation 100% through online. This is comfortable and hence you can use it easily.
Globalisation Of Legal Industry
Posted on 10. Mar, 2010 by admin in general
Globalization: There is no specific term as to the meaning of Globalization (G11N ). Different dictionaries give different meaning of the word ‘globalization’. However the term globalization is used in many contexts referring to particular industry. In the business and financial context it would mean that the increase of trade around the world, especially by large companies producing and trading goods in many different countries or a Tendency toward a worldwide investment environment, and the integration of national capital markets . IMF defines globalization as ‘the process through which an increasingly free flow of ideas, people, goods, services, and capital leads to the integration of economies and societies. Major factors in the spread of globalization have been increased trade liberalization and advances in communication technology’ .
Globalization (globalisation) describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and execution. In general globalization is the a governmental policy favoring free trade, open borders, the free movement of capital and goods (but not always of people), elimination of tariffs and price controls (including artificial control of currency values), and the privatization of publicly-owned or controlled enterprises Factors that have contributed to globalization include increasingly sophisticated communications and transportation technologies and services, mass migration and the movement of peoples, a level of economic activity that has outgrown national markets through industrial combinations and commercial groupings that cross national frontiers and international agreements that reduce the cost of doing business in foreign countries. Globalization offers huge potential profits to companies and nations but has been complicated by widely differing expectations, standards of living, cultures and values, and legal systems as well as unexpected global cause-and-effect linkages. See also free trade .
Today, it has become possible that setting up of manufacturing units in the country where the labor is cheap and selling the goods all over the world. There also a growth in the services sector. Although world globalization is popularly used today , elements of globalization can be found when the companies started to operate in many countries- elements dates back to 17th century where the companies like British East India company (founded in 1600) and Dutch East India company started to operate. Dutch East India Company (Vereenigde Oostindische Compagnie or VOC in Dutch, literally “United East Indies Company”) which was founded in 1602 was the World’s First Multinational Corporation to be owned by investors through the issuance of stock equity It was also the first MNC to start a stock exchange in Amsterdam in 1602 . However modern globalization began when great depression in the international trade took place in 1930s and various countries imposed import restrictions for safeguarding their economies. The USA made many proposals for extending international trade & employment. In 1947, 23 countries signed an agreement (GATT- general agreement on tariffs & trade) related to tariffs imposed on trade. On 1st January 1995, the WTO replaced GATT, which had been in existence since 1947, as the organization overseeing the multilateral trading system. Upon signing the new WTO Agreements, members of GATT became the WTO members. The World Trade Organization (WTO) which consists of 153 member nations deals with the rules of trade between nations at a global or near-global level. WTO is an organization for liberalizing trade, a forum for governments to negotiate trade agreements, and a place for WTO members to settle trade disputes. Today’s Globalization is the result of WTO, fair treatment and the non discrimination is the main principals of WTO.
Globalization of Legal Industry: Globalisation of legal Industry refers to the opening of legal market/industry in the country to the other nations so that they can set up law firm and offer consultancy services, practice law.etc
Globalization of Law: Todays modern law passed by the countries in relation with the business, Intellectual properties, corporate law, banking, Internet law reflects the laws of many nations. Amendement to the these laws are carried out to accommodate such changes. Legal education today is shifting from traditional methods of teaching to more innovative approaches. As we see in many country law schools the law subjects are similar to the other countries as to the basics of law, jurisprudence. There is also an International law which governs the International Treaties, agreements. Intrnational law today is weak in context of enforcement,compared to the domestic law. As the nations are members of United Nations, sanctioning countries in violition with the International Law lies with the Security council.
Globalization of Legal Profession: The history of legal profession dates back to the ancient Greece and Rome. Earlier the individuals were supposed to plead their own cases, which was soon bypassed by the increasing tendency of individuals to ask a “friend” for assistance. However, around the middle of the fourth century, the Athenians disposed of the perfunctory request for a friend. In 204 BC , a law enacted by Romans, barred the advocates from taking fees.Later it was abolished by Emperor Claudius, who legalized advocacy as a profession and allowed the Roman advocates to practice openly Today one needs to complete the law education approved by the Bar council and has to pass the bar exams of particular state and enroll before the sate to practice in the state. However, the liberalization in the legal profession has made an individual/lawyer to practice law in other country.
1.England and Wales: There are about 10,000 Barristers and 60,000 of solicitors in England and Wales today. The General Council of the Bar (known as the Bar Council) and other laws govern the barristers in UK and the Law Society of UK governs the Solicitors in UK. Only the Solicitors and Barristers are allowed to practice in the UK. Practice of law by foreign lawyer: Even the Foreign Lawyers eligible to be enrolled as the Solicitor of in England and Wales if he get through in the qualified lawyers of transfer Test(QLTT) The Qualified Lawyers’ Transfer Test (QLTT), England ’s official transfer exam for foreign attorneys. It is a test in which candidates are expected to demonstrate a basic familiarity with English statutes, cases, practice rules and the principles of common law. QLTT Exams are conducted in many countries annually. The test covers four heads (subject areas): Head 1 – Property, Head 2 – Litigation, Head 3 – Professional conduct and accounts, Head 4 – Principles of common law. There are exemptions to certain countries on this. Generally lawyers from common law countries who have studied their law in English medium needs to sit for professional conduct and accounts ( head 4 ) exam only. However most of the US attorneys need to get through in head 1, 2, and 3 also.
2.Singapore: As on 2006,there were about 3,476 advocates and solicitors in Singapore. The Law Society of Singapore governs the represents solicitors and maintains and improves standards of conduct and training. The Legal Profession Act (1967) governs the legal profession in Singapore. Foreign lawyers are regulated by the Attorney General’s Chambers . The AG’s chamber registers and regulates foreign lawyers. It also formulates laws, rules, guidelines and policies relating to joint law ventures, formal law alliances, representative offices, foreign law firms and foreign lawyers practicing in Singapore and advises on the practical application of the laws governing the legal profession. Foreign lawyers are required to register individually with the Attorney General’s Chambers in Singapore. Foreign lawyers cannot be sole practitioners and must work as employees, partners or directors in one of the following practice vehicles: As a foreign law firm, A Joint Law Venture (“JLV”),A Formal Law Alliance (“FLA”), As a foreign lawyer in a Singapore law firm.
3. South Africa There are approximately 13 000 practising attorneys . Law Society of South Africa and regional law societies regulates advocates (barristers) and attorneys (solicitors). According to section 15(1)(b)(iii) of the Attorneys Act, only the south African LLb holder is allowed to practice in the country. The Act also makes permanent residency or citizenship prerequisite as well as the passing of the South African Attorney’s Admission Examination prerequisite to the admission as attorney in South Africa. There are certain exceptions to this rule. The Attorneys Act itself relaxes admission requirements with regard to candidates hailing from certain designated countries do not have to serve as candidate attorneys and can be exempted from the need to obtain a South African LLB degree as well as from the need to sit for the South African Attorneys admission examination Foreign lawyers may establish under home title (e.g. as a Solicitor of England & Wales or as Attorney in USA) and are permitted to practice home and international law. In addition, they can also practice: international finance, project management, and arbitration. Certain work relating to litigation, appearance in court and conveyancing can only be conducted by South African attorneys. Foreign firms are not permitted to practise local law or to enter into partnerships or fee-sharing arrangements with South African firms. Foreign law firms today have hired. To practise local law, a foreign lawyer must requalify as a South African attorney. In order to be admitted as an attorney, an individual must have: an LLB degree from a South African university, two years’ service under articles of clerkship with a South African firm of attorneys, successful completion of the attorneys admission exam, South African citizenship or a permit for permanent residence in South Africa, Foreign lawyers must, in addition, attend a training course recognised by the provincial law society and then apply for admission as an attorney . Changes to the regulation of the legal professions, including the recognition of foreign legal qualifications, are planned. It is likely that a panel will be established to evaluate foreign qualifications under the long-awaited Legal Practice Bill which is released for comment and a draft in progress.
4.UAE In UAE, Foreign lawyers can practice local law, but only a Dubai national can appear in court in Dubai. A lawyer who is a national of one of the other Arab Gulf Cooperation Council countries can in certain circumstances obtain a licence to practise and to appear in the Dubai and UAE courts. Practising lawyers have to be licensed to practice law in the Federal courts by the Ministry of Justice and by the Emiri Diwan in the other Emirates. Lawyers must be graduates of a recognised law/Shariah college. The UAE is a member state of the WTO and has scheduled commitments to liberalise its legal services sector under the General Agreement on Trade in Services (GATS). There are many foreign law firms in UAE today recruits the lawyers from UAE for their practice in UAE courts .
5.Oman Royal Decree 108 of 1996 regulates the legal profession in Oman. There is no independent bar association or law society. The ministry of Justice maintains a committee to regulate the activities of domestic and international lawyers. Foreign lawyers are overseen by and required to be registered with the Ministry of Justice in accordance with Royal Decree No. 108/96 regulating the conduct of the legal profession in Oman. Foreign lawyers are required to be licensed to practice in Oman by the Ministry of Justice. At present foreign lawyers can advise on Omani law and if they speak Arabic they can appear before the Omani Courts. Foreign law firms were previously, pursuant to Royal Decree No. 108/96, required to introduce Omani partners into their practices by 31 December 1999. However with the introduction of Royal Decree No. 16/2000, the foreign law firms who had been granted licenses prior to the date of introduction of this law have been given a further extension of 3 years whereafter they will be required to form partnerships with local lawyers in order to establish or have an office in Oman.
6. Abu Dhabi International law firms can apply for a license directly from the Executive Council in Abu Dhabi. Firms established outside of the UAE will be able to set-up branches in Abu Dhabi provided they satisfy certain conditions. Such as: 1. To have practiced law outside of the UAE for at least 15 years; 2. To have, in aggregate, at least 50 partners; 3. To obtain the consent of the Executive Council of the Government of Abu Dhabi (the “Executive Council”); and 4. To register the branch with the Abu Dhabi Department of Planning and Economy. The application to the Executive Council must be accompanied by the following documents: 1. A “statement of capabilities” or a “CV” of the firm, containing the type of activities carried out by the main branch, the areas of specialisation and past experience 2. A certificate from the official body under whose supervision the main branch works (such as the “Law Society” or “Bar Association”). 3. A Resolution by the firm’s management to open a branch in Abu Dhabi, specifying the name of the resident partner(s) who will manage the branch; 4. A certificate issued by a bank indicating the financial status of the main branch, 5. The CVs, academic qualifications and professional licenses issued to the legal consultants selected to reside in Abu Dhabi, who may not be less than five, including one or more partner; 6. A draft plan for training and qualifying UAE law school graduates to carry out legal consultancy work, including training them at the main office, and 7. An undertaking from the managers of the main branch that the Abu Dhabi branch will carry out its activities according to the highest professional standards. .
7. California There are over 160,000 active lawyers in the State of California. Only the lawyers who have passed the bar exams and enrolled before the California bar council are allowed to practice in California. Lawyers from the other states of California can take up the Bar exam and enroll before the bar council of California to practice in California. Solicitors qualified in England and Wales can sit for bar examination on the basis of the solicitor qualification (Rule 4.30 of the Rules of the State Bar.) An alternative route for foreign lawyers to practice in California is available via a Foreign Legal Consultant license which permits foreign lawyers restricted legal practice within the State on the basis of their home country qualifications and experience. A Foreign Legal Consultant in California may provide legal services relating to the law of the country in which they are licensed to practice law. They must file an annual report with the State Bar of California and an annual renewal fee. Foreign Legal Consultants are subject to certain restrictions: they cannot provide legal advice on the law of the State of California nor on the laws of the USA; they cannot appear in court as an attorney for anyone other than himself or herself; There are also restrictions on the type of work a Foreign Legal Consultant may do, mainly relating to property, probate and family law. The State Bar of California may issue a license to practice as an Foreign Legal Consultant to lawyers who: are a member in good standing of a recognised legal profession in a foreign country; who are admitted to practice as an attorney or equivalent and subject to effective regulation and discipline by a duly constituted professional body or public authority; who have been engaged in the practice of law for at least four of the six years immediately preceding the application. Applicants must supply proof of admission to practice in their home country and evidence of educational and professional qualifications. The 2003 California Rules of Court set out the rules for Foreign Legal Consultants under Rule 988.
8. New York There are over 147,000 resident and active lawyers in the State of New York. It is required to pass the Multistate Professional Responsibility Examination (MPRE), and a character and fitness investigation to qualify as an attorney in New York. The New York State Board of Law Examiners administers the bar exam. It is open to graduates of US and foreign law schools, although rules vary depending on whether the law school is an ABA-approved US law school, a non-ABA approved US law school or a foreign law school (see below for special provisions relating to graduates of foreign law schools). Section 520 of the Rules of Courts of Appeals outlines the eligibility rules for candidates to sit the New York State bar examination. Lawyers with foreign law degrees may qualify to take the bar examination under the rules outlined in section 520.6 of the Rules of the Court of Appeals for the Admission of Attorneys and Counselors at Law. New York requires that candidates who have received their legal education outside of the USA demonstrate that their legal education is the qualitative and quantative equivalent of the legal education requirements to those who have received their legal education in the USA. If a candidate has qualified as a lawyer in an English common law jurisdiction the programme of study must be the quantative equivalent of legal education at an ABA-approved law school. If not, applicants must complete a programme of a minimum 20 credit hours at an ABA-approved law school. Solicitors qualified in England and Wales must have 3 years’ formal education in order to sit the New York State bar examination. Solicitors who have qualified via the Common Professional Examination (CPE) route are not recognised as having an adequate legal qualification in order to sit the bar examination. These candidates must complete an additional 20 hours of study. Candidates must provide proof of admission to practice in the jurisdiction in which they are qualified, or if not admitted, proof that they have successfully completed the educational requirements needed to practice in that jurisdiction. For applicants from England and Wales, this means proof of their law degree, Legal Practice Course (LPC) and completed training contract. A Foreign Legal Consultant license allows lawyers qualified in a non-US jurisdiction to provide legal services in the State of New York on their home country law or the laws of other jurisdictions in which they are qualified. Foreign Legal Consultants are subject to certain restrictions: they cannot provide legal advice on the law of the State of New York nor on the laws of the USA; they cannot appear in court as an attorney for anyone other than himself or herself; they cannot hold themselves out as a member of the New York State Bar. There are also restrictions on the type of work a Foreign Legal Consultant may do; mainly relating to property, probate and family law. The Supreme Court may issue a license to practice as a Foreign Legal Consultant to lawyers who: are a member in good standing of a recognised legal profession in a foreign country; who are admitted to practice as an attorney or equivalent and subject to effective regulation and discipline by a duly constituted professional body or public authority; who have been engaged in a practice of law for at least three of the five years immediately preceding the application. Applicants must intend to ptactice as a legal consultant in the State of New York and maintain an office for this purpose. They must supply proof of admission to practice in their home country and evidence of educational and professional qualifications. Part 521 of the Rules of the Court of Appeals for the Admission of Attorneys and Counselors at Law covers the rules regarding Foreign Legal Consultants.
9. Texas There are approximately 70,000 practicing lawyers in Texas. The State Bar of Texas regulates the profession .One needs to complete Texas bar exam conducted by Texas Board of Law Examiners to qualify as an attorney in Texas and enroll before Texas bar council. The State Bar requires that every attorney completes fifteen hours of continuing legal education each year to maintain an active law license. Foreign lawyers must demonstrate that the legal education that they have received is the substantial equivalent of the education provided by an ABA-approved law school. Applicants must submit proof of their educational qualifications to a professional credential evaluation service.Foreign legal consultants: An alternative route for foreign lawyers to practice in Texas is available via a Foreign Legal Consultant license which permits foreign lawyers restricted legal practice within the State on the basis of their home country qualifications and experience. Foreign Legal Consultants are subject to certain restrictions: they cannot provide legal advice on the law of the State of Texas nor on the laws of the USA; they cannot appear in court as an attorney for anyone other than himself or herself; they cannot hold himself or herself out as a licensed Texas attorney. There are also restrictions on the type of work a Foreign Legal Consultant may do, mainly relating to property, probate and family law, and on the name or title of his or her practice. The Supreme Court may issue a license to practice as an Foreign Legal Consultant to lawyers who: are a member in good standing of a recognized legal profession in a foreign country; who are admitted to practice as an attorney or equivalent and subject to effective regulation and discipline by a duly constituted professional body or public authority; who have been engaged in the practice of law for at least three of the five years immediately preceding the application; possesses the good moral character and general fitness requisite for a member of the Texas Bar; is at least twenty-six (26) years of age; who intends to practice as a legal consultant in the State of Texas and maintain an office for this purpose .
10. Australia There are approximately 45,000 solicitors and 5,000 barristers in Australia. The Law Council of Australia, governs the legal profession in Australia. English law degrees are generally recognized in Australia, but further re-qualification may be required depending on individual state’s own rules . Requirement for foreign practitioner registration in Australia/“fly-in, fly-out” rights of foreign lawyers: The Model imposes a general prohibition on the practice of foreign law in Australia unless the practitioner is an Australian-registered foreign lawyer or an Australian legal practitioner. However, an overseas-registered foreign lawyer will not be subject to the general prohibition on practicing foreign law in Australia provided the lawyer: 1. practises foreign law in Australia for one or more periods that do not in aggregate exceed 90 days in any period of 12 months, or is subject to a restriction under the Migration Act 1958 of the Commonwealth of Australia that has the effect of limiting the period during which work may be done, or business transacted, in Australia, and 2. Does not maintain a legal office for the purpose of practicing foreign law or does not become a partner or 3. director of a law practice in Australia.
Granting of registration to foreign lawyers Registration is granted by the relevant state or territory authority and may include conditions or restrictions as deemed appropriate. Under the Model legislation, in order to become an Australian-registered foreign lawyer: 1. the foreign lawyer must be entitled to practise law in a foreign jurisdiction, in that the lawyer is properly registered to engage in legal practice in (that) foreign country by the foreign registration authority for the country; 2. the jurisdiction in question must have an effective system of regulating the practice of law; and 3. the lawyer must be a fit and proper person to be registered as an Australian-registered foreign lawyer. Permissible scope of practice (including employment issues) of an Australian-registered foreign lawyer: There are limitations on the scope of practice by an Australian-registered foreign lawyer. The permissible services are: 1.doing work, or transacting business, concerning the law of a foreign country where the lawyer is registered by the foreign registration authority for the country; 2.legal services (including appearances) in relation to arbitration proceedings of a kind prescribed under the regulations; 3.legal services (including appearances) in relation to proceedings before bodies other than courts, being proceedings in which the body concerned is not required to apply the rules of evidence and in which knowledge of the foreign law of the country in which the foreign lawyer is registered is essential; and legal services for conciliation, mediation and other forms of consensual dispute resolution of a kind prescribed under the regulations. The Model legislation prohibits an Australian-registered foreign lawyer from appearing in any court (except on his or her own behalf) and from practicing Australian law in Australia except when the lawyer is advising on the effect of an Australian law where the giving of such advice is “necessarily incidental to the practice of foreign law” and the “advice is expressly based on advice given on the Australian law by an Australian legal practitioner who is not an employee of the foreign lawyer”. 4.An Australian-registered foreign lawyer is permitted to employ one or more Australian legal practitioners but such employment does not allow the foreign lawyer to practice Australian law in Australia. In addition, the Australian legal practitioners so employed (unless employed in a law firm with an Australian-registered foreign lawyer as a partner with at least one other partner an Australian legal practitioner) must not provide advice on Australian law to, or for use by, the foreign lawyer or practice Australian law in Australia in the course of that employment. Form of practice of an Australian-registered foreign lawyer: In general terms, an Australian-registered foreign lawyer may engage in the practice of foreign law in the following ways (subject to any conditions imposed on his or her registration): 1. on his or her own account; 2. in partnership with one or more Australian-registered foreign lawyers and/or one or more Australian legal practitioners; 3. as a director or employee of an incorporated legal practice or as a partner or an employee of a multidisciplinary 4. partnership (provided legal practice in that form is permitted by the relevant state or territory); 5. as an employee of an Australian legal practitioner or law firm; or 6. as an employee of an Australian-registered foreign lawyer. Applying for registration An overseas-registered foreign lawyer is eligible to apply to the “domestic registration authority” for the grant or renewal of registration as a foreign lawyer. An application must be made in the approved form and accompanied by the required fees (which are not to be set so as to be greater than the maximum fees for a practising certificate in the relevant Australian jurisdiction). An applicant may also be required to meet any reasonable costs, for example, costs associated with making inquiries into the applicant’s qualifications, incurred by the domestic registration authority. Various matters are to be included in an application for registration, for example: 1. details of the applicant’s educational and professional qualifications; 2. A statement that the applicant is registered to engage in legal practice by one or more specified foreign 3. registration authorities in one or more foreign countries; 4. A statement that the applicant, in his or her capacity as a lawyer, is not the subject of disciplinary 5. Proceedings in Australia or in a foreign country, including any preliminary investigations that might lead to disciplinary proceedings; 5. a statement whether the applicant has been convicted of an offence, in which case an applicant is required to provide certain details about that matter. Various matters are to be included in an application for registration, for example: 1.details of the applicant’s educational and professional qualifications; 2. a statement that the applicant is registered to engage in legal practice by one or more specified foreign 3. registration authorities in one or more foreign countries ;
11. China There about 130,000 lawyers who work in around 11,000 domestic law firms in China. China’s lawyers are represented and regulated by the All China Lawyers Association (ACLA) which was founded in 1986. Foreign law firms have been permitted to maintain representative offices in the People’s Republic of China (PRC) since 1992, and recent figures from the Ministry of Justice indicate that 114 firms have chosen to do so. Foreign law firms can establish multiple representative offices in the PRC and a number of firms now have more than one representative office although there are certain restrictions attached to this as outlined below. China’s foreign law firm regulations, set out by its State Council, outline the services that foreign law firms can legitimately provide in China. Foreign law firms are permitted to advise clients on the law of the firm’s jurisdiction and on international conventions and practices. Second, they can advise clients on the implications of the Chinese legal environment. Third, they are permitted to form long-term co-operation agreements with Chinese law firms. Foreign law firms must engage Chinese firms to advise on PRC law and cannot employ PRC lawyers, unless they give up their PRC practicing certificate. Foreign firms cannot form joint ventures with local PRC law firms. Those foreign lawyers working in China must register annually; and approval of licenses can be a lengthy and bureaucratic process. In terms of opening up additional representative offices, a foreign firm can only do so when its “most recently established representative office has been engaged in practice for three consecutive years.” UK Lawyers are not able to qualify as Chinese lawyers and the Chinese lawyers are not permitted to sit the Qualified Lawyers Transfer test in England and Wales In December 2001, China acceded to the WTO and made a number of commitments on the further liberalization of legal services .
12. Hong Kong The legal profession is made up of solicitors, regulated by the Law Society of Hong Kong, and barristers, regulated by Hong Kong’s Bar Association. As in the UK, solicitors enjoy limited rights of audience in the Hong Kong courts. Hong Kong’s higher courts are: the High Court; the Court of Final Appeal. There are currently over 5,000 practicing solicitors and more than 650 firms in Hong Kong. In 2007 there were 49 foreign law firms – 22 of them British and 906 foreign lawyers. Certain restrictions still apply to foreign lawyers and firms: 1. Foreign lawyers cannot employ or enter into partnerships with Hong Kong solicitors to practise Hong Kong law. 2. A registered foreign firm may enter into an association with a local firm, sharing premises, facilities and personnel, provided that the ratio of foreign lawyers to local lawyers does not exceed 1:1 3. Foreign lawyers and foreign law firms may practise the law of their home jurisdictions or that of a third country, and are subject to the Foreign Lawyers Practice Rules. 4. Anyone offering their services to the public as a practitioner of foreign law, other than a solicitor or barrister, must register with the Law Society of Hong Kong as a foreign lawyer. To qualify for registration with the Law Society of Hong Kong, foreign lawyer must: 1. be a person of good standing in the jurisdiction in which they qualified 2. must be a fit and proper person; 3. A foreign law firm must be of good standing and must have substantial experience. Under the Law Society of England & Wales Qualified Lawyers Transfer Regulations, Hong Kong lawyers are still entitled to automatic admission as solicitors in England and Wales on the basis of their Hong Kong qualifications. However, UK lawyers must sit the Qualified Lawyers Qualification Examination (QLQE) to requalify as a Hong Kong solicitor.
13. India There about One million (1000000) in India. Bar council of India and state bar council rules, regulates the lawyers in the country. A lawyer enrolled in one state is allowed to practice in that state and before the Supreme Court. However, he is not allowed to practice in other state unless he makes an application to the Bar Council of India requesting for transfer of his name from the roll of state bar council where he is enrolled to other bar council within 6 months of his practice in other state. Although foreign law firms were allowed set up liason office in India, foreign lawyers are not allowed to practice in Indian Courts. Foreign law firms in India today can offer consultancy services to its clients. There are many foreign law firms in India today . Requalification as an Indian Advocate It is possible for a foreign lawyer to seek admission as an Indian advocate under the following conditions: 1. if citizens of India, duly qualified, are permitted to practise law on a reciprocal basis in his/her country of nationality; 2. if he/she has a degree from a University recognised by the Bar Council of India 3. if he/she is over 21 years of age; 4. if he/she fulfils any other conditions as laid down under the rules made by the relevant State Bar Council under the provisions of the Advocates Act.
14. Japan In 2007 there were 23,133 Japanese lawyers (known as Bengoshi) and 230 law corporations in Japan. One needs to pass the competitive national bar exam and candidates must complete an eighteen-month training period organised by the Legal Training and Research Institute (LTRI)to become lawyer in Japan. Japan liberalised its system in 1995, by allowing local joint enterprises between Japanese and resident foreign lawyers. The ‘joint enterprise’ arrangement proved unsatisfactory because it denied Japanese bengoshi membership of a major international law firm, whether as a partner or associate. The joint enterprise did not give bengoshi the benefits that full membership of a firm would have brought, in respect of status, remuneration, training, resources and career prospects. Clients could still not obtain the advice they required from a single firm capable of advising them on all aspects of the same transaction. It resulted in three separate organisations (the Japanese partnership, the foreign partnership and the joint enterprise) instead of what would otherwise be a single organisation multi-national partnership. Since 2005 Japanese and registered foreign lawyers have been able to provide legal services through a single law firm, and foreign law firms have been allowed to employ Japanese lawyers. Lawyers from foreign countries may be eligible to become foreign special members (Gaikokuho-Jimu-Bengoshi) of the JFBA and advise on the law of the country in which they qualified. Foreign special members may not practice law within a prescribe rang, such as representation in proceedings at courts, public prosecutor’s offices or other governmental agencies or appraisal relating to a law other than the law of the country of primary qualification. With permission foreign special members may also practise law relating to other countries. In cases involving international arbitration, a foreign special member may represent a client regardless of the case’s governing law. To qualify as foreign special member an applicant must: 1.be a qualified lawyer 2.have three or more years post-qualification experience (up to one year’s experience in Japan working for a Japanese lawyer or a registered foreign special member may be credited towards this) not have been disbarred under the laws of their home country or Japan within the previous three years 3.be personally committed and legally and financially able to practise in Japan 4.be able to compensate clients for any damages caused through malpractice Lawyers from any jurisdiction may sit the bar exam and qualify as a lawyer. However Japanese citizenship is required to serve as a judge or prosecutor.
15. Korea With about 5,000 members, the Korean Bar Association (KBA) is the main regulatory body for lawyers in Korea. It also represents 14 local bar associations. Membership of the KBA is compulsory for all practicing lawyers. Under the Korean Attorney-At-Law Act, a foreigner must pass the Korean Bar examination in order to practise as a lawyer in Korea. There is no knowledge of any foreigner actually achieving this.
In order to become a lawyer in Korea, a candidate must pass the Judicial Examination and complete a 2-year training course at the Judicial Research and Training Institute. After finishing the course, the candidate may be appointed as a judge or a prosecutor, or practice law as a private attorney. At the beginning of 2000 the total number of judges was 1,508, there were 1,134 prosecutors but only 3,800 private practitioners. In the last five years this number has nearly doubled to 6,600, however, the underdeveloped legal sector is still seen as a drag on the economy. Over the past few years, Korea has begun to pursue widespread reform across its criminal and civil justice system. These reforms have had a direct impact on the profile of the legal profession. First, Korea has taken steps to increase the number of its lawyers. Tough bar exams had until recently restricted the supply of new lawyers to around 300 a year, making both firms and lawyers more generalist than specialist. However, under recent changes, 1000 new lawyers are being qualified each year. This has caused some short term problems since there are not enough law firms to provide employment to the new lawyers coming on the market. Second, expanding the number of Korean lawyers has not addressed the shortage of international legal practice skills that Korea faces. Korea is the 11th or 12th largest economy in the world but has only around 10 firms doing most of the international legal work. Korea is now beginning to tackle this problem by undertaking a limited opening of its legal market. Foreign law firms are at present not allowed to establish in Korea, nor are foreign lawyers allowed to practise law in Korea. Although, a number of individual foreign lawyers have been widely employed as foreign legal consultants by Korean law firms for over 20 years, they are not permitted to operate independently yet, nor are they subject to any formal registration or enrolment system. The EU Chamber of Commerce estimates that foreign lawyers often fly in to consult with their clients but since they are usually based either in Hong Kong or Singapore, this all adds to the general expense of legal services in Korea.
16. Belgium The Belgian legal system is based on the civil law tradition.Due to the linguistic division in Belgium, lawyers are either Avocat (French), Advocaat (Flemish) or Rechtsanwalt(German). There are over 6,000 lawyers registered with the French- and German-speaking Bar Association and over 8,400 registered with the Flemish-speaking Bar Association. There are two federal bars in Belgium : the Ordre des barreaux francophones et germanophones (O.B.F.G.- French- and German-speaking Federal Bar) and the Orde van Vlaamse Balies (O.V.B. – Flemish speaking Federal). Regulation lies with the local bar association in one of the 27 judicial districts. The bilingual judicial district of Brussels has two bar associations, one Flemish-speaking and one French-speaking. Belgium implemented the Establishment Directive 98/5/EC. Establishment is permitted for EU, EEA and Swiss nationals who are qualified in these countries. It allows them to give advice in international law, the law of their home country as well as Belgian law. Registration under this directive is with the local bar associations for French and German-speaking and for Flemish-speaking (click on “Lokale Balies”). Legal services by EU, EEA and Swiss qualified lawyers can also be provided cross-border on a temporary basis under the provisions of the Lawyers Services Directive 77/249/EEC. Contrary to the Establishment Directive, there are no conditions of nationality under the Lawyers Services Directive. Solicitors of England and Wales (and other EU, EEA and Swiss qualified lawyers) seeking to requalify in Belgium can do so in two ways: 1.Through Art. 10 of the Establishment Directive 98/5/EC, under conditions of nationality and after three years of regular and effective practice of French law in France . Applicants need to contact their local bar of registration; 2.Through the Diplomas Directive 89/48/EEC, now incorporated into the Recognition of Professional Qualifications Directive 2005/36/EC, by sitting the relevant equivalence examination administered by the OBFG or the OVB .
17. France The French legal system is based on the civil law tradition. France has a monist civil code legal tradition with a Latin notarial system. This system was principally introduced under Napoleon following the French Revolution and it superimposed French canonical customary law that had, at heart, the principle of the absolute sovereign. France is ruled by a strict hierarchy of norms. Highest is the Constitution, followed by parliamentary statutes (les Lois) that also include a sub-hierarchy: institutional act (loi organique), ordinary act (loi ordinaire) and then ordinance (ordonnance). The executive power has right to enact regulations (règlements) which are called décrets (for Prime Minister and President of the Republic) and arrêtés (for the rest of the executive branch). It is internationally renowned for having produced the Napoleonic Code Civil which spread to other parts of Europe and the world. The French profession of avocat stood at over 47,000 on 1 January 2007. Almost half of the profession practise in the Paris region. Notaires (civil law notaries) play an important role to play in the French legal system for conveyancing, probate and related family matters. They numbered 8,595 on 1 July 2007. Regulation lies with the 181 Barreaux (local bar associations). Registration is mandatory to be able to practice The Paris Bar, with over 17,000 avocats, is by far the most influent ial bar association of all French bars . The 180 provincial bars have organised themselves into the representative Conférence des Bâtonniers to exert some influence on the evolution of the profession. The Conseil National des Barreaux, created in 1990, is the overarching national body for all French bars and deals with the following functions: 1. representation of the profession of avocat in France and abroad; 2. harmonisation of rules and regulations for the profession of avocat; 3. professional training for avocats; 4. access/requalification to the profession of French avocat for foreign lawyers. France implemented the Establishment Directive 98/5/EC. Establishment is permitted for EU, EEA and Swiss nationals who are qualified in these countries. It allows them to give advice in international law, the law of their home country as well as French law. Registration under this directive is with the local Barreau. Legal services by EU, EEA and Swiss qualified lawyers can also be provided cross-border on a temporary basis under the provisions of the Lawyers Services Directive 77/249/EEC. Contrary to the Establishment Directive, there are no conditions of nationality under the Lawyers Services Directive .
18. Germany The German legal system is based on the Romano-Germanic Civil Law tradition. The German profession of Rechtsanwalt (lawyer) stood at 142,830 on 1 January 2007. The German profession of Steuerberater (tax adviser) has also been approved by the Solicitors Regulation Authority (SRA) for the purpose of Multi National Partnerships (MNPs). Approximately 9,500 lawyers practise as Notar (Civil law notary) in Germany. German law requires their intervention in many business and commercial transactions, as well as in probate, conveyancing and some family matters. The BRAK (Bundesrechtsanwaltskammer) is the federal regulatory organisation for the profession of Rechtsanwalt. Regulation actually lies with the 27 regional Rechtsanwaltskammern and the one attached to the Bundesgerichthof (Federal Court of Justice) in Karlsruhe. Membership is compulsory. In addition to the regulatory bodies, the DAV (Deutscher Anwaltverein) is the representative body for its 66,000 Rechtsanwälte members. It has branches throughout Germany as well as in France, Italy and the United Kingdom. Germany implemented the Establishment Directive 98/5/EC. Establishment is permitted for EU, EEA and Swiss nationals who are qualified in these countries. It allows them to give advice in international law, the law of their home country as well as German law. Registration under this directive is with the local Rechtanwaltskammer. Non-EU/EEA/Swiss nationals who are however qualified in the EU/EEA or Switzerland can establish in Germany but are restricted to give advice only in international law and the law of their home country. Legal services by EU, EEA and Swiss qualified lawyers can also be provided cross-border on a temporary basis under the provisions of the Lawyers Services Directive 77/249/EEC. Contrary to the Establishment Directive, there are no conditions of nationality under the Lawyers Services Directive. Under Section 206 of the Legal Profession Act (Bundesrechtsanwaltsordnung – BRAO), the Federal Ministry of Justice has approved the following foreign professions as being equivalent to the German’s lawyer profession and therefore entitled to the right of establishment in Germany to give advice in international law and the law of their home country:Argentina (Abogado),Australia (Barrister, Solicitor, Legal Practitioner),Bolivia (Abogado),Brazil (Advogado),Cameroon (Avocat/Advocate),Canada (Barrister, Solicitor),Croatia (Odvjetnik),India (Advocate),Israel (Orech-Din),Japan (Bengoshi),Mexico (Abogado),Namibia (Legal Practitioner/Advocate/Attorney),New Zealand (Barrister, Solicitor),Russian Federation (Advokat),South Africa (Attorney/Prokureur, Advocate/Advokaat),Turkey (Avukat),USA (Attorney-at-Law),Venezuela (Abogado) .
19. Poland As on 2006, ther are 22,545 Legal Advisers (Radca Prawny)and 8,990 Adwokat in Adwokat have a monopoly on representation in criminal matters although they work in all practice areas. The legal advisers work in all practice areas but criminal and can also work in-house. Members of both professions can go into partnership with one another. The profession of Legal Advisers is regulated by the National Council of Legal Advisers (Krajowa Izba Radców Prawnych – KIRP) at the national level and by 19 local Councils at the local level. The profession of Adwokat is regulated by the Polish Bar Council (Naczelna Rada Adwokacka) at the national level and 24 local bar associations at the local level. Poland implemented the Establishment Directive 98/5/EC. Registration under this directive is with the local bar or council (see above links). European lawyers may choose between the two professional bodies but then become bound by the code of ethics of the body of their choice .
20. Russia The Russian legal system is based on the Civil Law tradition. Russian lawyers who are called as advocates (????????), are governed by advocacy act 2002. Foreign lawyers can practice in Russia and can provide advice on international law and their home law. Foreign practices must register as firms with the Ministry of Justice. The Russian profession of advocate has been approved by the SRA for the purposes of Multi-National Partnerships (MNPs).
21. Spain As on 2006 there were 116,394 practicing lawyers in Spain. Local bar associations (Colegios de Abogados ) governs the lawyers in Spain. Only the lawyers registered before these Associations are allowed to practice in the country. There are some relaxations for EU member country. Spain implemented the Establishment Directive 98/5/EC. Establishment is permitted for EU, EEA and Swiss nationals who are qualified in these countries. It allows them to give advice in international law, the law of their home country as well as Spanish law. Registration under this directive is with the local Colegio.
Globalization of Law firms: Law firm is an group/organization or business entity formed by one or more lawyers for the purpose of providing legal service and practice to the clients who are need of assistance in civil or criminal cases. Most of the law firms today organized as partnership firms where the partners are joint owners and business directors of the legal operation. The world’s oldest continuing partnership is that of Cadwalader, Wickersham & Taft, founded in 1792 in New York City . According to Alton B.Parker, Marshau and Son is the world’s oldest law firm . In response to the globalization of business law and in order to serve giant, transnational companies, law firms are globalizing their practice. The biggest firms are merging across borders, creating mega practices with several thousand professionals in dozens of countries. Today, most of the International law firms operate in more than 40 countries including Abu Dhabi , Argentina, Australia, Austria, Aberjian, Bahrain, Belgium, brazil, Canada, chili, china, Columbia, Chez Republic, Egypt, England, France, Germany, India, Hungary, Indonesia, Italy, Japan, Kazakhstan, Malaysia, Mexico, Netherlands, Philippines, Poland, Russia, Saudi Arabia, Singapore, Spain ,Sweden, Switzerland, Taiwan, Thailand, Ukraine, USA, Vietnam, Venezuela. All these possible as the countries were member to the WTO and liberalized their legal services. Most of the international law firms today hire the legal talent from the country where it has got office as the partners, associates and lawyers. There are also lawyers eligible to practice in 2-3 countries. For example: US lawyer may have license to practice in UK, Australia, and South Africa. All it depends on the eligibility to practice law and enrollment before such bar councils and societies. Most of the International Law firms receives more than 50% of revenue from the corporate side. International Law Firms Practice areas mainly includes corporate, M&A, Securitization, IPR, Infrastructure, loans and credits, securities, commercial litigation, agreements, contracts, and real estate.
Globalization and LPO (legal process outsourcing): India, South Africa, Sri Lanka, Singapore, and Malaysia are the major Legal Process Outsourcing destinations in the world. Almost 80% of LPO services are outsourced to India. Outsourcing Legal work to India began in 1995, when the US based Bickel and Brewer opened its office, Imaging & Abstract International (captive LPO and Subsidiary of Bickel and Brewer LLC) in Hyderabad. I & A International dealt with digitalization of the legal documents and creating searchable databases such as to scan, abstract and index documents. Later on, the firm hired lawyers to review documents produced in lawsuits. In 2001, GE was the first company to offshore its in-house legal work in India. Since then a lot of companies have entered the arena in one form or other. Allen & Overy (UK) and Hammonds (UK) both began outsourcing word processing and document production to India in 2003. Milbank Tweed Hadley & McCloy of the US is outsourcing work in India. Outsourcing is not a new phenomenon. Driven by the competition and the temptation of cheaper labor, the industry took off in the late 1980’s with the rise of outsourcing manufacturing jobs abroad. After the rapid increase in telecommunication, Internet and information technology, outsourcing of white-collar jobs started to take place. Although LPO providers cannot advise on US and UK law, they can provide assistance to the US attorneys and UK solicitors in Legal Research, E-Discovery, Contract Review, and Litigation support services. LPO’s also have contributed to the idea of Globalization of the Legal Industry.
Source:
http://acronyms.thefreedictionary.com/Globalization
http://dictionary.cambridge.org/define.asp?key=33185&dict=CALD
http://financial-dictionary.thefreedictionary.com/globalization
https://www.imf.org/external/np/exr/glossary/showTerm.asp#91
http://en.wikipedia.org/wiki/Globalization
http://definitions.uslegal.com/g/globalization/
http://encyclopedia2.thefreedictionary.com/globalization
http://www.articlesbase.com/international-business-articles/the-dutch-east-india-company-was-the-worlds-first-multinational-corporation-1278429.html
http://www.experiencefestival.com/a/Dutch_East_India_Company/id/2024886
http://en.wikipedia.org/wiki/Dutch_East_India_Company
http://www.exchange-handbook.co.uk/index.cfm?section=articles&action=detail&id=60613
http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm
http://en.wikipedia.org/wiki/History_of_the_legal_profession
http://www.encyclopedia.com/doc/1O245-legalprofession.html
http://www.qltt.com
www.fleindia.com www.qltt.in
http://www.collaw.edu.au/Future-Students/Lawyers-Crossing-Borders/Qualified-Lawyers-Transfer-Test/QLTT-Eligibilty/
http://www.lawsociety.org.uk/becomingasolicitor/outsideengandwales/transfertest.law
http://www.sra.org.uk/solicitors/qltt.page
http://www.qltt.co.uk/
http://www.qltt.com/international-english-solicitor/index.htm
http://international.lawsociety.org.uk/ip/asia/596/practise
http://www.sra.org.uk/sra/regulatory-framework/3024.article)
http://www.qltt.com/what_overview.htm
http://www.agc.gov.sg/lps/index.html
http://www.lawinfo.org.za/courts/legal_system.asp
http://www.ialsnet.org/meetings/business/HagenmeierCornelius-SouthAfrica.pdf
http://international.lawsociety.org.uk/ip/africa/568/practise
http://www.info.gov.za/bills/2000/draftlpb.htm
http://international.lawsociety.org.uk/ip/africa/1014/practise
http://www.omanet.om/english/oman2000/sec5/1.asp
http://international.lawsociety.org.uk/ip/africa/1018/practise
http://international.lawsociety.org.uk/ip/americas/612
http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10163
http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10163&id=1304
http://international.lawsociety.org.uk/ip/americas/616/practise
http://international.lawsociety.org.uk/ip/americas/612/practise
Follow this link for rules http://www.law.northwestern.edu/career/llm/documents/NY_FLC_rules.pdf
http://www.ble.state.tx.us/
http://www.texasbar.com/Template.cfm?Section=Home&Template=/ContentManagement/ContentDisplay.cfm&ContentID=14051
http://www.texasbar.com/Template.cfm?Section=Pro_Bono_and_Community_Service&Template=/ContentManagement/ContentDisplay.cfm&ContentID=9163
http://international.lawsociety.org.uk/ip/americas/618/practise
http://international.lawsociety.org.uk/ip/asia/1073/practise
http://www.actlawsociety.asn.au/
http://www.lawcouncil.asn.au/shadomx/apps/fms/fmsdownload.cfm?file_uuid=314C0D0B-1C23-CACD-2253-F19A22E78A87&siteName=lca (Foreign lawyers and the practise of foreign law in Australia)
http://www.lawcouncil.asn.au/information/foreign-lawyers/foreign-lawyers_home.cfm
http://international.lawsociety.org.uk/ip/americas/618/practise
Learn How to Invest With a Foreclosure Course
Posted on 10. Mar, 2010 by admin in general
Many people want to invest in real estate but they do not know how to go about it. Currently, the market is prime for investing and with the proper methods, many people can get involved and begin to make money. Investors are realizing that it is best to take a foreclosure course instead of jumping into the market. With a class, investors can optimize their earning potential because they will understand the process. The knowledge will assist them in making the best decisions and in finding the property that is right for them as an investor.
One thing that people will be able to gain from a class is the ability to separate myths from reality. There are a lot of myths that surround real estate investing and when people believe in the myths they will make mistakes. They will miss out on great deals and will not realize their full investing potential. Classes help separate myth from fact so, people can stop squandering their opportunities. Myths hold so many people back so, this is one of the most important tools that an investor can receive.
Investment secrets are also revealed in a foreclosure course. There is a lot of information that only insiders know. During a class, many of the insiders are willing to share that information so, people are more apt to find their investment properties. Inside information can be the key for people to succeed in the business. Most people have to have connections in order to gain inside information. By taking a class they are able to get the inside information in a much easier way without all of the hard work that making connections entails.
A class will also teach investors how to negotiate. This is something that is incredibly important for investors to understand. With the proper negotiating skills, more money can be made. Those who do not know how to negotiate can loose thousands of dollars. It is important for investors to go into a deal knowing how to properly negotiate. While most people think they have the skills necessary, when an actual negotiation occurs they realize that they do not know the first thing about what they are doing or what they are supposed to do.
Financing is also something that will be taught in a foreclosure course. This is also an incredibly important lesson. It is necessary for investors to learn their financing options so, they can get the best deal possible. In order for people to excel in investing, they must fully understand the process.
Students will also learn about contracts. They will learn how to enter into a legally binding contract with the seller. This will help the investors make sound investments that will stand up in court. With a proper contract in place, people can take full advantage of their investment opportunities.
Foreclosures Canada offers all of these things with their foreclosure course. From insider secrets to contract information, students are able to learn everything necessary in order to make sound investments. For more information on the classes they offer, visit them online at http://www.foreclosurescanada.com.
Synapseindia â?? Outsourcing/ Offshoring Service Provider In India
Posted on 09. Mar, 2010 by admin in general
Growing tremendously since its inception in the year 2000, Synapse India has become a prominent name in the global outsourcing and offshoring arena. The company has been successfully catering to the IT needs of various industries encompassing hospitality, medical and healthcare, finance and investment, sports and many others. The company has been showing a tremendous growth of hundred percent year on year since its beginning. Owing to quality of services it offers, the company has become a trusted partner for many of the reputed overseas clients in different domains. Itâ??s the unremitting quality of services that has won the company the prestigious CMMI level 3 accreditation, Microsoft Gold partnership, along with the reputed NASSCOM and FICCI certifications. Launched at a meager investment and a few countable employees, this brain child of Shamit Khemka (the CEO and Founder) has become a fully fledged offshoring and outsourcing service provider in India. The company today boasts of multiple units across the country and a workforce in the excess of 300. Headquartered in the NCR (National Capital Region) of India, the company has expanded to the NSEZ (Noida Special Economic Zone) with its new unit open in September 2009. The new unit is ultra modernized, more spacious (with the capacity to accommodate more than 200 employees), and well equipped. Shamit Khemka is a strong willed person with highly positive frame of mind. It was his strong will to step in to entrepreneurship while still pursuing his graduation that brought forth Pharos Infotech (in 1994) â?? his maiden entrepreneurial venture. Pharos was the first dot com to introduce Bulletin Board Service (BBS) in India â?? much before even VSNL could launch its internet services. Pharos came immediately after his graduation in commerce stream from St. Xavier College. The second venture of Shamit was Sampatti.com â?? a website dedicated to the real estate industry in India. The interactive directory and database of real estate introduced by Sampatti became an instant hit among the realty investors in India. Synapse India is the third and most recent venture of Shamit. The company is the most preferred outsourcing/ offshoring destination for clients based in the USA, UK, Australia, Canada and other parts of the world.
The American Society Of Home Inspectors
Posted on 09. Mar, 2010 by admin in general
Where can you find a home inspector you can trust?
The American Society of Home Inspectors, founded in 1976, is the oldest and largest professional society of home inspectors in North America. With more than 6,000 certified home inspectors across the United States and Canada, the goal of the American Society of Home Inspectors is to build customer awareness of the importance of quality home inspection and enhance the professionalism of home inspectors.
This society answers to no one but the client – that is, you. Whether you are a buying a home, selling a home, are a real estate professional or a home inspector, the Society provides you with just you need in professionalism and customer service.
When it comes to buying a house, we are faced with a seemingly endless series of critically important decisions. That is why, when you have found a house that you feel is right for you, a home inspector is so important. He or she can help you to affirm that the house is sound, and then help you get acquainted with your new home.
The American Society of Home Inspectors is known for excellence. All their home inspectors are professionals are more than qualified to do the job required of a good home-inspector. By choosing one of their home inspectors, you are choosing someone that you can trust to objectively and independently provide a comprehensive analysis of the home’s major systems and components.
The other group of people who benefit from the American Society of Home Inspectors is the real estate professional. Whether you’re an agent, a broker, an appraiser, a builder, a lender, a real estate attorney – it doesn’t matter — your customers look to you for recommendations on who they should hire to conduct their home inspection. The American Society of Home Inspectors is the group that provides you with the professional help your client will surely appreciate.
With their exceptional service and expert technical knowledge, members of this society will enable your customers to make informed decisions about the sale or purchase of a home, thus helping you in your role as a trusted resource.
The American Society of Home Inspectors also serves as a source of information for its members. The website serves as a one-stop resource about the profession. The American Society of Home Inspectors provides their members with all sorts of knowledge: from technical information to consumer product-safety-commission recalls. And if a member is still learning the ropes of home inspection, the society provides a standards of practice, code of ethics, and state regulations to assist them.
It is these things that set members of the American Society of Home Inspectors apart from others in the industry. Because their experience, professionalism, and commitment to superior customer service, member of this society are a notch above the rest in the home inspection marketplace.
Five Things To Remember In Difficult Times
Posted on 09. Mar, 2010 by admin in general
â??I have not looked at any of my holdings and donâ??t intend to. I donâ??t want to be tempted to jump because I think Iâ??d be more likely to jump in the wrong direction than the right one. My advice has always been to choose a sensible diversified portfolio and stop reading the financial pages. I recommend the sports section.â?Quotation attributed to Richard Thaler, professor of behavioral science and economics, University of Chicago Graduate School of Business.[1]These are difficult times â?? nobody knows how and when markets will stabilise. We appreciate the emotions they arouse. But you should take some comfort that our planning process is not driven by what is happening in the market at any point in time. It focuses on achieving your long term financial objectives, based on reasonable projections of long term investment returns. However, to give you the best chance of receiving those long term returns requires discipline to stick to an agreed strategy both when markets are performing well and when they are performing poorly. Admittedly, when markets are under the severe pressures we are currently experiencing it is human nature to want to take flight and forego the discipline. But experience suggests that it is times like these that distinguish the successful long term investor from the fair weather, â??buy high-sell lowâ? speculators, who start out with best intentions but succumb to their emotions when the going gets tough. Now while we donâ??t know for sure that what worked in the past will work in the future, unless you think this is the end for the capitalist growth engine we are pretty confident that it will. Below we discuss five aspects of our approach that we think are worth bearing in mind to help you to fight the inevitable emotions: 1. Your risk exposure is personalised for you and your circumstances  We have devoted a lot of time and effort together in modelling your life situation and objectives to determine a long term risk exposure (i.e. your target asset allocation) appropriate for you and your circumstances. This exposure has been chosen taking into account your tolerance for risk, your capacity for risk, your need for risk and your specific lifelong cash flow requirements. Importantly, it is a long term strategic exposure that allows for both up and down markets. If your risk exposure is causing you current discomfort, it may be helpful to remind yourself that your decision to accept that risk exposure was well considered.Every market participant is experiencing some pain from this current market downturn. Those who are hurting most are those who did not have a well considered approach to risk leading into the downturn. And those who are likely to experience most regret are those who do not have a risk exposure tailored to their circumstances and objectives when the market eventually recovers. 2. Your investment approach is applicable through all market conditions Your investments continue to be managed according to the same philosophy and decision framework that we applied through the recent up markets (and prior down markets). The approach is robust, uncomplicated and not dependent on market conditions. It is an approach that we continue to believe will give you the best chance of delivering the long term outcomes you have planned for. 3. Your exposure is well diversified Your portfolio is well diversified across and within asset classes. Diversification is often misunderstood and underestimated. Why would you hold elements in your portfolio that are not performing? For the simple reason that predicting the future is much tougher than most people imagine â?? in fact, we believe predicting the future reliably is impossible. Todayâ??s winner often becomes tomorrowâ??s loser â?? that is the very nature of risk. When we blend these â??winnersâ?? and â??losersâ?? in a portfolio and focus on the outcome of the portfolio as a whole, the benefits of diversification appear. For those with defensive assets in their portfolios, we remind you that their primary purpose is to dampen your risk. We have never advocated chasing return with this part of your portfolio â?? that is not its purpose. Your defensive assets are restricted to high credit quality securities that are well diversified across a range of issuers. While this may not get you the extra basis point returns offered by higher yielding but higher risk securities, you know with a very high degree of confidence that the capital value of this part of your portfolio is assured. 4. Avoid the urge to value your position on a daily basis  While the current turmoil on markets may create an urge to revalue your portfolio on a more regular basis, this practice generally leads to higher levels of emotion that translate into a greater need to react â?? to do something â?? when the best response is likely to be to do nothing. The closer you follow the market, the more likely you are to be distracted by factors that are irrelevant. These factors are commonly known as â??noiseâ??. The level of â??noiseâ?? (irrelevance) increases with the frequency of observation. It is suggested that when we view our performance over a one year period we observe 0.7 parts of â??noiseâ?? for every one part of performance. This â??noiseâ?? ratio increases to 2.3 parts of â??noiseâ?? for every one part of performance when we increase our observation frequency to monthly. As our observation frequency increases further so too does the distraction level of â??noiseâ?? â?? if viewing on an hourly basis, weâ??ll be distracted by 30 parts of irrelevant information for every one part of relevant information. We recommend that you should view your investment portfolio similar to the way you treat your home or a direct property investment. We expect that you do not enquire about the value of your home or investment property on a daily basis and only become actively interested if there is an intention to sell. If appropriately chosen, your commitment to your investment portfolio should also be very long term â?? daily, weekly, quarterly or even annual changes in valuation are really irrelevant. Just because you can revalue and transact daily doesnâ??t mean it is a productive thing to do â?? in fact, we would argue it is more likely to be counterproductive to both your financial and mental health!Unless your circumstances or objectives have changed, a serious look at the ongoing appropriateness of your portfolio once a year should be more than often enough. 5. Remember that past collapses have all felt like the end of the world  A common characteristic of almost every bear market is a mental projection that this is the end of the world as we know it. It has been said that the four most dangerous words in finance are â??this time itâ??s differentâ?. These words are most often uttered in the midst of market manias and market collapses. For a trip back though history, we quote a recollection of the conditions experienced in the market collapse that occurred in the early 1990â??s.At that time, the Anglo-Saxon economies of the US, Canada, the UK, Australia and New Zealand were all either in or flirting with recession.The recession came on the heels of an era of financial excess, as exemplified on Wall Street by the junk bond king Michael Milken and in the movies by Gordon â??greed is goodâ? Gekko.In the US, excessive and imprudent lending for real estate had contributed to the failure of hundreds of community-based â??savings and loansâ?? institutions, triggering a multi-billion dollar government bailout.In the United Kingdom, consumers who had leveraged themselves heavily to real estate suffered a severe blow when rising interest rates pushed house prices sharply lower, both in real and nominal terms.In Australia, too, market deregulation had given way to an era of increasingly reckless lending by financial institutions, which until that point had had little experience in managing risky commercial loans.The consequence in Australia was the failure of a number of major financial institutions, including the state banks of Victoria and South Australia, the Teachersâ?? Credit Union of Western Australia, the Pyramid Building Society, merchant banks Tricontinental, Rothwellâ??s and Spedleyâ??s and the Estate Mortgage trust.At that time, the crisis seemed intractable and insoluble. Journalists and economists talked of systemic breakdown and a global challenge for market capitalism, much as they are now.Now, while no two market crises are ever the same, it is fair to say there are parallels between todayâ??s downturn and the events of early 1990s, particularly in the damage caused by excessive leverage and insufficient oversight by many financial institutions of the risks they were taking on. We recommend that you take a moment to reflect on the path of the Australian share market over the past 27 years by reference to the attached chart. Additionally, for those who wish to go back further in history we have included a link on our website that compares US bear markets of the past century. Hopefully, it will provide some perspective to the current situation â?? unfortunately, we canâ??t say when this downturn will end. [3]
Why Pursue Investing in Barbados?
Posted on 09. Mar, 2010 by admin in general
Does investing in Barbados sound like something you would like to do? If you like the idea of investing in a place where the political and societal infrastructure is very stable, a functional high tech telecom infrastructure, low tax system and business-like suitable place, then Barbados is a best option for you.
Examples of existing Barbados Investment Developments are Financial Services, Manufacturing, and Information Technology. So why do you think investing in Barbados a critical way to expand your business? For one, businessmen may opt to invest in Barbados because of the possibilities of seeing the best accounting, financial and legal services in the world, even in such a remote location within the Caribbean chain of islands. Understanding the way Barbados local government sustains their best efforts in putting up systematic ways of enhancing the infrastructures, taxation system and business opportunities, you can view Barbados a potential business venture moving forward. Part of the government efforts are composed of boosting the Corporate Registry, and signing better tax treaties with the UK, Canada, and the US.
There are many benefits you need to consider for you to gain positive results in pursuing Barbados Investment Developments. For one, you can get a 10-year tax holiday complete with 21/2% tax rate per year for every year after that. You get exempted from any import duties. Capital plus profits and dividends get complete repatriation as well. The ten industrial parks are not only fully-serviced but they provide less expensive and subsidized factory space too. Worker training comes with cash grants while customs services are both effective and cooperative.
The Barbados Investment and Development Corporation will give you consulting services free of charge. Since the government is dedicated to promoting private enterprises, you will find that government officials will welcome your legitimate efforts to invest in the place. Operating expenses are inexpensive so that savings reach at least 40% and even more. At the same time, you can hire people who are trainable, literate, productive yet skilled so that your business experiences low turnover and absenteeism rates.
The stability and integrity of the social, political and economic systems are guaranteed for people who choose to do investing in Barbados. The EU, Canada, and US also have arrangements that permit investors in Barbados to gain duty-free access.
Now what about holiday investments? Is it possible to make holiday investments, such as investing in Barbados real estate properties? Actually, this may be the more commonly-known form of investing in Barbados that most people are aware of. Investing in a holiday real estate property may mean setting aside at least $150,000 up to $2,000,000 at the most per holiday investments property you purchase. The appeal of this type of investment is that you can always rent out your holiday investments when you are not occupying it or have not lent it out to friends and family for their use. If you can manage to get 100% occupancy year-round, then that is a pretty good source of income for you that can help you recoup the cost of having your holiday investments upgraded or the initial purchase price.
Retiring In Costa Rica Condos—Expand Your Horizon in Your Golden Years
Posted on 08. Mar, 2010 by admin in general
Retiring in style! Spending the golden years in luxury! These are small aspirations for those who have spent a good part of their lives under the grinding pressure of corporate demands. Even a decade ago, the retirees headed straight for beach destinations in Florida or California and likes. But with real estate market getting saturated and over priced, many retirees have abandoned their idea of spending their golden years at Miami. But as it comes to retiring in style, a class of retirees does not mind taking a step further, take up a few hours’ flight and land on a foreign land, where lifestyle is relaxed, climate perfect and cost of living far cheaper. With real estate prices becoming an important determining factor for choosing retirement destinations, retiring in foreign countries have become more a rule than exception and Costa Rica condos have become a sort of retirement heavens for thousands of US retirees in the recent years. A smart marketing has definitely something to do with the massive US tourist influx in this country, but it is a few intrinsic attractions that make Costa Rica the perfect retirement destination for the baby boomers from the USA—both moneyed as well as the short-in-cash retirees. Costa Rica retirement properties have something for all. Other Caribbean countries, namely Belize, Panama and Nicaragua too are in the race of luring US retirees, but it is Costa Rica, with its unique benefits and incentives that have outpaced its neighbors in the race. Add to the list a well developed private health care sector and lower crime rates and it is no wonder the country boasts of 20,000 American retirees that have made Costa Rica condos home for their retirement years. Other benefits apart, it is the affordable real estate that makes Costa Rica a sort of retirement heaven for the North American retires pushed out of the very expensive vacation property market back home. While ocean view Costa Rica condos will cost you about $300,000 in Costa Rica, it is difficult to find comparable condo properties in any of the hot locations in US and Canada. Moreover, purchasing and owning Costa Rica condos is easy. The foreigners can enjoy the same set of rights over their Costa Rica condo properties as the natives. It is no wonder, Costa Rica condos are gaining in so huge popularity. With a strong community of expatriates to give you support, Costa Rica condos will give you a feel of home away from home. With sunny beaches, lush rainforests, roaring volcanoes and magnificent mountains to keep you company, Costa Rica retirement means living in the lap of nature. If you are looking for sea-view Costa Rica condos, then explore the Guanacaste region. Or if you are looking for Costa Rica condos by the Pacific, the real estate in Dominical and Playa Jaco can serve your purpose best. On the Atlantic side, the province of Limon is the home of an amazing collection of Costa Rica condos perfect for retirement lifestyle. For more affordable beach front retirement properties, you can explore the Costa Rica condos market in Cahuita and Puerto Viejo.In short, retiring in Costa Rica is affordable, enjoyable and safe. If you are looking forward to wonderful retirement years ahead, then Costa Rica condos are the best options to go with.
What If……….?
Posted on 08. Mar, 2010 by admin in general
There are no economic and financial seers. No one, as far as we can tell, has access to future facts. At best, we have clever opinions based on imperfect reasoning and partial understanding of even present and past facts. However, we are all obliged to act in some fashion to make or preserve income and wealth. Action entails having some view of the world as it may unfold within an investment horizon. The search for a consensus view is both futile and often most harmful.
The paragraph above establishes the context for this essay, which is an exercise in supposal and conjecture. Suppose certain big things happened in the world economy what consequences would ensue and what investment actions would then be required.
The Supposals
Consequences
Given the supposals above what might be some of the consequences over the next few years? Those delineated below are illustrative and far from exhaustive.
The author is no better(likely worse) at trying to divine consequences than the interested reader. Indeed, the reader should view these consequences as an amusing template and conjure his or her own structures and trajectories. The more actionable these consequences the better the reader will be served in making investment choices. Remember, though, the most significant consequence will be the one we did not foresee. Those tempted by linear extrapolation of the most recent past should remind themselves that we are in an economic episode not an economic change of universe. This too will pass in a few ( 3 to 4?) years. We are sliding into a deep valley but not an abyss. There is another side which we will reach and then climb up and out. Of course, it will look different on the other side but for many shrewd or merely lucky( and the select few who are both shrewd and lucky) investors, innovators and risk takers it will be a much better place.