Businesses and governments face many political risks. Understanding of these risks helps in managing them in a better way. http://i-strategic.com/ highlights some of the most common political risks.
2. Bribery
• Any forced hiring or bribing for taking of
any contracts or tenders by any third party.
3. Capital Controls
• Limitations on profit amounts to be
converted to home currency, delays in
transfer of payment to home country and
restriction on amount that can be sent o
home country.
4. Contract Default
• Breach of contract or any default in the
repayment of debt
5. Nationalization
• Forced sale of property/plant, assets and
the like to government usually on lower
than market price.
6. License Cancellation
• Termination or modification of company
license as a lack of popular support ahead
of elections.
7. Protest Strikes
• Inability to operate due to political unrest;
strikes, sit-ins and protests.
8. Regulatory Change
• Complex labor laws and strict government
regulations can greatly effect company
functioning.
9. Taxation
• Taxes on high profits, duplicate taxes and
other profit reducing taxations.
10. War and Terrorism
• Border closures and open threat of terror
attacks as well as country rivalry can affect
trade and supply of raw material.
