Brus Chambers opens office in New York

Brus Chambers, a Mumbai-based law firm has opened a subsidiary firm headquartered in New York. Brus Chambers LLC was incorporated as a Limited Liability Company (LLC) in New Jersey in March 2015, and opened its New York office on 26 May 2015, which now serves as the head-office with branch offices located in New Jersey, Washington and Missouri, said the firm’s managing partner Shrikanth Hathi.

Hathi said via email that the New York office on the fifth floor of 830 Third Avenue already housed 32 US-qualified lawyers and paralegals, while New Jersey, Washington DC and Missouri employed nine US-qualified fee-earners each.

Hathi, who is also the president of Brus Chambers LLC, said that the firm was approved by the New York Bar for practising in the state’s courts. He said that the process of obtaining approval was relatively simple and took only two to three months.

Asked about foreign law firms coming into India, he said: “I think Indian lawyers should be ready for that. What are they afraid of? Are they afraid of doing good quality work? Because competition will improve quality, at least that is what I believe.”

He added that foreign law firms were not looking to come to India for the litigation market, because it did not make business sense for them. Their main interest would be in legal outsourcing where they could save big money by getting their work done in India.

As for Brus’ prospects in the US, Hathi was upbeat, noting that the office would focus on commercial litigation, international arbitration, documentation and shipping work as well as some criminal defense work primarily on the white collar side. “We had established ourselves in March and we have got very good work there. In fact we have got work from law firms as well.”

According to Brus’ press release announcing the new office, “Dr Hathi is of the view that if United States can [allow] setting up foreign law firms in their country; even India should consider allowing setting up foreign law firms in India after considering all other factors including reciprocity between the countries.”

Authored by Fawaz Shaheen, LEGALLYINDIA and as published on August 5, 2015

Current Trends in FDI

Global foreign direct investment (FDI) inflows fell by 16 per cent in 2014 to $1.23 trillion, down from $1.47 trillion in 2013.1 The decline in FDI flows was influenced mainly by the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. New investments were also offset by some large divestments. The decline in FDI flows was in contrast to growth in GDP, trade, gross fixed capital formation and employment.

UNCTAD forecasts an upturn in FDI flows to $1.4 trillion in 2015 and beyond ($1.5 trillion in 2016 and $1.7 trillion in 2017) due to growth prospects in the United States, the demandstimulating effects of lower oil prices and accommodating monetary policy, and continued investment liberalization and promotion measures. Forecasts for macroeconomic fundamentals and continued high levels of profitability and cash reserves among multinational enterprises (MNEs) support the expectation of higher FDI flows. However, a number of economic and political risks, including ongoing uncertainties in the Eurozone, potential spillovers from geopolitical tensions, and persistent vulnerabilities in emerging economies, may disrupt the projected recovery.

FDI flows to the latter now account for 55 per cent of the global total. Developing Asia drove the increase while flows to Latin America declined and those to Africa remained flat. FDI flows to developed countries dropped by 28 per cent to $499 billion. Inflows to the United States fell to $92 billion (40 per cent of their 2013 level), mainly due to Vodafone’s divestment of Verizon, without which flows into the United States would have remained stable. FDI flows to Europe also fell by 11 per cent to $289 billion. Among European economies, inflows decreased in Ireland, Belgium, France and Spain while they increased in the United Kingdom, Switzerland and Finland.

FDI Inflows
The global FDI decline masks regional variations. While developed countries and economies in transition saw a significant decrease, inflows to developing economies remained at historically high levels.

Inflows to transition economies declined by 52 per cent to $48 billion, as regional conflict and sanctions deterred new foreign investors. FDI flows to the Russian Federation fell by 70 per cent to $21 billion, in part an adjustment from the level reached in 2013 as a result of the Rosneft-BP mega-transaction. FDI flows to developing economies increased by 2 per cent to a historically high level in 2014, reaching $681 billion.

Developing Asia drove the increase while flows to Latin America and the Caribbean declined and those to Africa remained flat. FDI flows to Asia grew by 9 per cent to $465 billion in 2014. East Asia, South-East Asia and South Asia all saw increased inflows. FDI in China amounted to $129 billion, up 4 per cent from 2013, mainly because of an increase in FDI in the services sector. FDI inflows also rose in Hong Kong (China) and Singapore. India experienced a significant increase of 22 per cent to $34 billion. However, FDI flows to West Asia continued their downward trend in 2014 for the sixth consecutive year, decreasing by 4 per cent to $43 billion, owing to the security situation in the region.

FDI flows to Latin America and the Caribbean – excluding the Caribbean offshore financial centres – decreased by 14 per cent to $159 billion in 2014, after four years of consecutive increases. This decrease was mainly the consequence of a 72 per cent decline in cross-border mergers and acquisitions (M&As) in Central America and the Caribbean, and of lower commodity prices, which reduced investment in the extractive industries in South America. While FDI flows to Mexico, the Bolivarian Republic of Venezuela, Argentina, Colombia and Peru declined, flows to Chile increased, owing to high levels of cross-border M&A sales. In Brazil, the sharp fall of FDI in the primary sector was compensated by an increase in FDI in manufacturing and services, keeping total flows similar to 2013 levels. Inflows to Africa remained stable at $54 billion.

North Africa saw its FDI flows decline by 15 per cent to $12 billion, while flows to Sub-Saharan Africa increase by 5 per cent to $42 billion. In Sub-Saharan Africa, FDI flows to West Africa declined by 10 per cent to $13 billion, as Ebola, regional conflicts and falling commodity prices negatively affected several countries. Flows to Southern Africa also fell by 2 per cent to $11 billion. By contrast, Central Africa and East Africa saw their FDI flows increase by 33 per cent and 11 per cent, to $12 billion and $7 billion, respectively.

Structurally weak, vulnerable and small economies witnessed divergent trends in FDI flows in 2014. FDI to least developed countries (LDCs) increased by 4 per cent to $23 billion, led by greenfield investment projects. Landlocked developing countries (LLDCs) experienced a fall of 3 per cent in FDI inflows to $29 billion, mainly in Asia and Latin America. FDI inflows to Small Island developing States (SIDS) increased by 22 per cent to $7 billion, boosted by a strong rise in crossborder M&As sales. Overall, China became the largest FDI recipient in the world in 2014, while the United States dropped to the third largest host country, primarily because of the large Verizon divestment by Vodafone (United Kingdom).

Of the top 10 FDI recipients in the world, five are developing economies. Most major regional groupings and groups of economies engaged in regional integration initiatives experienced a fall in inflows in 2014. The global and regional declines in FDI inflows in 2014 affected the performance of FDI to regional groupings and initiatives. The groups of countries discussing the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP), saw their combined share in global FDI flows decline. Two Asian groups bucked the trend – the Association of Southeast Asian Nations (ASEAN), with a 5 per cent increase in inflows, and the Regional Comprehensive Economic Partnership (RCEP), with a 4 per cent increase.

FDI trends in regional groups were largely determined by wider global trends, economic performance and geopolitical factors. Longer-term cooperation efforts will, for the most part, lead to increased FDI in regional groups, by opening sectors to investment and aligning policies for the treatment of investors. Intraregional FDI may increase as a result of fewer investment restrictions (e.g. liberalizing investment in particular industries) or reduced transaction costs and converging policy regimes. Extraregional FDI (i.e. inflows by investors from outside a region) may increase as a result of enlarged market size (especially important for regional groups of smaller economies). Investment from outside a region may also increase as a result of coordinated efforts to promote regional investment. The impact of regional integration on intraregional and extraregional FDI varies considerably by region. The share of intraregional FDI among some regional groupings of developing economies in total inward FDI is still very low. In contrast, regional integration in Asia, e.g. through ASEAN, has had a significant impact on FDI. FDI inflows into the APEC economies reached $652 billion in 2014, accounting for more than half of global FDI flows. IntraAPEC FDI flows and stocks are significant, at about 40 per cent of inward stock in 2009–2011.

FDI outflows
Investment by MNEs from developing and transition economies continued to grow. Developing Asia became the world’s largest investor region. In 2014, MNEs from developing economies alone invested $468 billion abroad, a 23 per cent increase from the previous year. Their share in global FDI reached a record 35 per cent, up from 13 per cent in 2007.

Developing-country MNEs have expanded foreign operations through greenfield investments as well as cross-border M&As. More than half of FDI outflows by developing-economy MNEs were in equity, while developed-country MNEs continued to rely on reinvested earnings, the share of which increased to a record 81 per cent of their FDI outflows. Equity-financed flows are more likely to result in new investments and capital expenditures than are reinvested earnings, which may translate into further accumulation of cash reserves in foreign affiliates.

Among developing economies, MNEs from Asia increased their investment abroad, while outflows from Latin America and the Caribbean, and Africa fell. For the first time, MNEs from developing Asia became the world’s largest investing group, accounting for almost one third of the total. Nine of the 20 largest home economies were developing or transition economies, namely Hong Kong (China), China, the Russian Federation, Singapore, the Republic of Korea, Malaysia, Kuwait, Chile and Taiwan Province of China. Outward investments by MNEs based in developing Asia increased by 29 per cent to $432 billion in 2014. The growth was widespread, including all the major Asian economies and subregions. In East Asia, investment by MNEs from Hong Kong (China) jumped to a historic high of $143 billion, making the economy the second largest investor after the United States. The remarkable growth was mainly due to booming crossborder M&A activity. Investment by Chinese MNEs grew faster than inflows into the country, reaching a new high of $116 billion. In South-East Asia, the increase was principally the result of growing outflows from Singapore, to $41 billion in 2014. In South Asia, FDI outflows from India reversed the slide of 2013, increasing fivefold to $10 billion in 2014, as large Indian MNEs resumed their international expansion. Investments by West Asian MNEs declined by 6 per cent in 2014, owing to decreased flows
from Kuwait, the region’s largest overseas investor, with flows of $13 billion. Investments by Turkish MNEs almost doubled to $7 billion. MNEs from Latin America and the Caribbean, excluding offshore financial centres, decreased their investment in 2014 by 18 per cent to $23 billion.

Outward flows from Mexican and Colombian MNEs fell by almost half to $5 billion and $4 billion, respectively. In contrast, investment by Chilean MNEs - the region’s main direct investors abroad for the year - increased by 71 per cent to $13 billion, boosted by a strong increase in intracompany loans. Brazilian MNEs continued to receive repayments of loans or to borrow from their foreign affiliates, resulting in negative FDI outflows from that country for the fourth consecutive year.

Outward investments by MNEs in Africa decreased by 18 per cent in 2014 to $13 billion. South African MNEs invested in telecommunications, mining and retail, while those from Nigeria focused largely on financial services. These two largest investors from Africa increased their investments abroad in 2014. IntraAfrican investments rose significantly during the year. 

MNEs from transition economies decreased their investments abroad by 31 per cent to $63 billion. Natural-resource-based MNEs, mainly from the Russian Federation, reduced investments in response to constraints in international financial markets, low commodity prices and the depreciation of the rouble.

Investments from MNEs based in developed economies were almost steady at $823 billion at the aggregate level, but this figure hides a large number of new investments and divestments that cancelled each other out.

Outflows from European MNEs remained flat. A robust rise in investments by German and French MNEs was offset by the negative flows from MNEs in the United Kingdom and Luxembourg. Germany became the largest investing country in Europe. Vodafone’s divestment of its stake in Verizon Wireless heavily dented outflows from the United Kingdom.

Reproduced from Projects Today