Top Glove Essay Example

the positive forecast make by the VDMA Plastics and Rubber Machinery Association The objective of doing this report is to analysis the macro environment of Germany and explores new markets in Germany. Besides, we need to analysis whether it is possible for Top Glove to enter Germany’s market. We had analysis the political and economic aspect of Germany. Political and Economic Large and Open Market Germany has a large market with high gross domestic product (GDP).

Germany has the GDP of $2. 96 trillion in the year of 2009(economywatch, 2009). A high gross domestic product will secure an investor in investing in the country. GDP represent a country economic output. An investor will like to choose a country with high GDP to invest or do business; this is because a high GDP means the economy of the country is healthy. This represent that the country has high productivity and the ability to produce product. Germany has the largest economy among the Europe Countries. A country with large economic will benefit the investors.

This is because a large market will provide more opportunity for the investors. With more opportunities and options investors believe that this situation will benefit them. Larger market tend to have greater competitive too, with greater competitive, investors will always try to improve their product so that they will be in a gain situation. This is the reason why investors would like to invest in larger market compare to those countries with smaller market. Germany was ranked top five strongest economies in the world. Country with a rank of top economy in the world will let investors to feel much secure to invest in the

country.

Investors will feel comfortable and safe compare to invest in those countries which have weak economic. Investors tend to choose country with strong economies is because country with strong economic is much more stable. Country with strong economic will overcome obstacles much easier than countries with weak economic. This is because country with strong economic like Germany has the ability to confront it. Besides, Germany has high population too; a high population will increase the demand of product. As investors they would like to have greater demand for product to increase the company’s profit.

Germany is an open market too. Germany welcomes foreign investors to invest and start up business in their country. An open market attracts investors because and open market provides an arena for all the investors for their business. German government actively encourages foreign investment in their country and German Law provides foreign investors national treatment. Under German law, foreign companies are treated equally with their owned companies and they are treated indifferently. There isn’t any nationality requirement on director and stakeholders for a company.

Secure Investment Framework Germany provide secure investment framework for all the investors. Highly developed economic and political frameworks provide the necessary security for the business investment. The security for business investment is very important for investors before they decide to invest in a country. Secure investment framework provide investors a secure environment for them. If investors felt unsecure with the country’s framework, they might refuse to invest in the country. A modern state, Germany provides high protection in the business investment.

Other parties will not able to know the policy, idea and the strategy of the firms. This secure investment

framework will also perform highly security and stable position to protect the important document, files of the firm, those important information and top secret of the firm will be protected. This prevents the leak of important information to the competitors. This is the reason why highly secure investment framework is very important to every investor. Unsecure investment framework will cause a firm to face plenty problems and might cause lost to the firm.

Germany’s judiciary and civil service institutions are professionally regulated to ensure their excellent service. Judiciary is the legal branch of a government and the system of courts in a country. Germany’s judiciary and civil service institutions are trained professionally and they are ready to provide the investors excellent service whenever they meet obstacle in the law and regulation in the country. Besides, contractual agreements are secure and intellectual property is strictly protected. Intellectual property means that the properties that result from original creative thought, as patents, copyright materials and trademark.

A firm’s contractual agreements and intellectual property are well protected in Germany and it ensures a firm’s right will not be abused by the others. Global Player Germany is a global player in economic. Germany has a quite top ranking in the export industries. Germany export was $1. 187 trillion in the year of 2009(economywatch, 2009). This prove that Germany has a strong economic which all the investors seek for. Besides that, the rubber industry creates a very interesting crossroads and the greater company in Germany country. It is a very constant situation of global level and consolidation is becoming an ideal in the economic world.

Other than that, Germany also is the largest leading

logistics of international and one of the world’s most innovative ideal of the countries. Germany has a strategy location in Europe (Appendix B). Germany is located in the Western Europe and it is quite a central location in Europe. It located next to Poland, Holland and Belgium. This will benefit the logistics operation and the export of product. With a great location, export of product will be much easier and this will increase the demand of product. A great location can help the logistics of the company too.

It does take long time for the product to reach the other countries in Europe if the product were produce in Germany. The strategy location of Germany is a benefit for a company. An investor would like to choose a great location to start up a business. There would not choose those countries which have bad location and hard to be assessed. On the other hand, Germany also plays host in most of the different direction and highly qualified range of small to medium-sized logistics service providers. This can help global player maintain the productivity into two levels which is import and export.

Therefore, the import and export definitely will cause the differentiated labor costs, a highly flexible labor force, and a robust commercial property market. This all is especially in the new federal states and area which can increase the benefit between the investors and the country of Germany. Then different labor costs will provide different quality of product in certain area but the Germany still in the same position to provide high quality of product with the higher labor cost which is export to the other country.

This is proved to be a key of factors in Germany still remain constantly in the logistics crown.

Protection for property right German is the top five of world’s largest economy. This shows that German is a favorable country for investor to do foreign investment and foreign acquisition. The German Government set a policy of national treatment to protect the investor’s property under German law. Intellectual property law have being enforced by German to protect the music, literature, artistic works, discoveries and inventions including the trademarks, patents, copyrights and industrial designs. For equipment that can reproduce material such as video recorder, video cassette, scanners and photocopiers are levied on taxes.

Trademark which is used on the property must not infringe on other property that already established in German market. A strong trademark is a valuable asset. The protection of trademark can in term of words, letters, numbers, pictures, color and sound. In order to gives an exclusive intellectual property right to owner, the property can be legally protected by registration. The trademark registration can be made in the German Patent and Trademark Office and the extend protection can apply for international registration at the World Intellectual Property Organization (WIPO/OMPI).

There are something called as community trade mark. It is a protection of property in European Union and it can apply at the Office for Harmonization. Patent is use to protect new technical inventions. In German, an invention at the German Patent and Trade Mark Office is not counted as patent. It is counted after go through a series of legally procedure. A granted patent is protected for 20 years and for special provision, field of pharmaceuticals and plant

protection products are able to extend up to 5 years. Besides, industrial design is important for foreign investor because can design the product own appearance.

In the protection of industrial design, it can protect three-dimensional objects such as glove and two-dimensional objects such as painting. It gives the exclusive right to the owner and avoids others to using your design without your permission. Industrial design is also represent an identity so the protection is crucial from the designer. The protection in German can last for 25 years once they registered at the German Patent and Trade Mark Office. In short, the protection of property right in German is no discrimination against any foreigners.

Expropriation and Compensation Germany has a fairly stable government with minimal political risk for international business and with little to no corruption. German government and political policy generally tend to provide a safe and comfortable environment for business with little risk of expropriation. If the process of expropriation were to happen, adequate compensation will be given to the firm. Expropriation is the act of government taking private property, the action of government taking away a private business from its owner.

The government does not take possession of assets and property without compensation. The expropriation is only permissible for the public goods. German law provides that private property can be expropriated for public purposes only in a non-discriminatory manner and in agreement with established principles of constitutional and international law. There is due process of law and transparency of purpose which let the firm to see through the process. The firm, investors and lenders will receive prompt, adequate and effective compensation if their properties were to

be expropriated.

Germany’s law provides protection too. There are property protection laws provided by the European Union. The government makes sure that the rights of the firms are protected and make sure that the investors are threat fairly. Competitive tax Germany has a strong investment culture since their tax rate is applicable to investors. Few changes has made by Germany to reduce to burden for corporation and attract the investors from other countries. The tax system is Germany including the company taxation, taxation of property, value added tax, tax deductions and customs.

There are three tax regimes for German investors in Investment Funds that are transparent funds, semi-transparent funds, and in transparent funds. Transparent fund is also called as white funds which is the most beneficial tax treatment (Alexander, 2004). An investor holding assets though an Investment Fund is taxed same as an investor holding it directly. There are exceptions on few situations. The capital gains from private individual investors are tax exempt if it is gain from securities and derive by Investment Fund regardless whether is distributed or retained.

For investors holding an asset directly, the exemption happens when the security has held more than one year before it disposal. Semi-transparent fund also called as grey fund. It is acceptable tax treatment. If the Investment Fund is not complies all the tax reporting and publishing requirement, investors will taxed on all income which derived by the Investment Fund regardless it is distribute or not. Unfortunately, there is no tax exemption in semi-transparent fund. Instead, capital gain by private individual investors from redemption or disposal of holding units which is at least one year is exempted.

But for corporate

investors, they are being fully taxed. In-transparent fund is a tax penalty for investors and this also called black funds. If an investment fund does not comply with the requirement of semi-transparent fund, therefore it will assign as black funds status. It going to tax investors not just on all the income derived from investment fund. Also 70% of the increase of the redemption price of the units in that year and also 6% on previous year. So, investors must understand the tax status and the condition in order to increase their investment fund and avoid any mistakes.

So, investors must compliance with the tax requirements when they start to invest in German. For corporation which holding units in transparent fund, it is tax exempt when the capital gains from the unrealized appreciation of shares and dividends, called as share related profit. Transparent fund will help the organization to find target funds with an appropriate performance. The taxation of capital gain is same in semi-transparent and in-transparent tax regime. Therefore, Investors must aware of this detailed information to enter German market and invest more extensively.