Argentina is one of Latin America's most innovative tech hubs and home to several pan-regional unicorn start-ups. However, until now, it lacked an adequate legal framework to fund start-ups through venture capital, crowdfunding platforms or seed capital. In order to boost local financing of new projects, Congress recently approved the long-awaited Entrepreneurship Law, which is set to change the start-up environment.
Argentina is slowly leaving behind a decade of over-regulation. As the country endeavours to make the transition from over-regulation to a private investment-friendly environment, expectations in the M&A sector are high. If the high-inflation and low-growth transition is overcome in the next few months, Argentina should regain significant attractiveness in the region and appeal to local and foreign investment.
Companies regularly store information about their customers, clients, employees, investors, partners and vendors. Privacy and data security are therefore important aspects of most M&A transactions. Although the risk of non-compliance with privacy laws may result in severe negative consequences, many M&A agreements still lack adequate privacy-related representations and warranties.
In 2014 the Austrian Supreme Court submitted a request to the European Court of Justice (ECJ) for a preliminary ruling on the interpretation of EU law regarding cross-border mergers. The ECJ recently ruled that in cases of merger by acquisition, all contracts entered into by the transferor company pass to the acquiring company without novation. Thus, the law applicable to the contracts before the merger also applies to the underlying contracts after the merger.
Shareholders in a company that is the subject of a takeover and merger have certain intrinsic rights available to them in the event that they dissent to the merger, most notably a right to have their shares purchased at a 'fair value'. The Cayman courts will approach the issue of fair value on the individual facts; the starting point is a valuation approach on the basis of no discount or premium attributable to the merger itself.
Cyprus is a popular jurisdiction for establishing special purpose vehicles with an increased involvement in shadow banking, which takes the form of, among other things, securities lending, repurchase and derivatives transactions. This has resulted in a call for strengthened regulations to mitigate risks and support financial stability. Newly introduced regulations now bring non-financial counterparties, such as limited liability companies, into the ambit of transparency reporting.
The European Union has proposed a new EU framework for screening foreign investment that raises security and public order concerns for the European Union and its member states. The commission intends to launch, and possibly complete, the proposed framework by the end of 2018. Opposition by several member states means that it is unclear whether the proposal will be approved by the Council of the European Union.