On October 1, 2014, the new Foreign Investment Promotion and Protection Agreement (FIPA) between China and Canada came into force. International investment is a key strategy for businesses that compete globally or aspire to do so, but foreign investment is risky. FIPAs are bilateral investment treaties that establish a framework of legally binding obligations and rights around foreign investment to help businesses in the member nations overcome the risks. China is Canada’s second-largest trading partner. It’s rapid growth and expanding economy has created more opportunity for direct foreign investment. This FIPA especially represents a strong opportunity for small and medium sized businesses in the targeted industries to enter the Chinese market.
5 key obligations of the new China-Canada FIPA: This FIPA will be in force for 15 years after which either nation can terminate it, though its rules will still apply to pre-termination investments for 15 years after termination. Here are five key obligations of it:
3 Tips To Make The Most Of The New FIPA: “Big businesses” might already be in the Chinese market, and already well positioned absorb the risks of international investment. Small and medium sized businesses with globalization aspirations will likely benefit the most from the protections that the new China-Canada FIPA affords. This FIPA specifically targets the energy, agriculture, mineral products, seafood, and shipping industries. SMEs in these industry sectors should take a good look at whether and how this new FIPA opens some opportunities for them. Here are three tips to get you started:
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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About the author: Megan Seto is a lawyer with McInnes Cooper. A member of its Tax and Cross-Border Law Teams, Megan is fluent in Taishanese and has a solid working knowledge of Cantonese. She can be reached at email@example.com.