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REWIND: International Business News #34

Posted on September 4th, 2012 | Author: admin

  • Apple’s rivals may be forced to become more innovative in the wake of Apple’s victory in its patent lawsuit against Samsung.  The nine-person jury awarded Apple $1 billion in damages after determining that Samsung violated a series of Apple’s patents, including the rectangular shape and rounded edges of the iPhone.  Apple and firms that emphasize unique design believe that the verdict is beneficial for intellectual property and businesses that invest in design. However, there is also concern that the decision could be a “minefield” for designers who second-guess their creations for fear of violating existing patents.
  • With one of the highest corporate tax rates among developed countries, more companies are leaving the United States and reincorporating abroad.  While companies list a number of reasons for moving, including the expansion of operations and greater geographic reach, tax considerations remain a key concern.  The U.S.’s top corporate tax rate is 35%, as compared with Ireland at 12.5% and further, U.S. companies are taxed on profits earned abroad while most developed countries only tax domestic earnings. Since 2009, at least 10 public companies in the U.S. have moved or publicly announced plans to move their address of incorporation abroad.  There are discussions and proposals by both the Democratic and Republican parties to amend the tax code.
  • Latvian banks are seeing an influx of foreign cash, with non-resident deposits representing nearly half the total deposits surpassing even Switzerland’s percentage of non-resident holdings. While Latvia has been a banking hub since Soviet times, accounts are growing as wealthy depositors from the former Soviet Union move funds from a struggling Cyprus and a protest-ridden Russia to Latvian banks.  Latvia is likened to a “Swiss Baltic state”, not only for its popularity as a banking hub, but for its protection of client confidentiality and links to potentially illegal activity.
  • Angela Merkel’s reluctance to support an EU trade action instigated by a German company against Chinese solar panel companies puts her at odds with the harder line taken by the EU trade commissioner against Beijing for unfair trading practices.  Chancellor Merkel supported a resolution through negotiations, a position which highlights China’s growing influence with European trading partners. The EU has faced challenges in creating a common trade policy among its member states, each of which is angling for beneficial commercial ties of its own.