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How can a change in the leadership/political party in power or the current political leadership in...

How can a change in the leadership/political party in power or the current political leadership in control affect an investor/international business with and within that country?

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The political climate of a country plays a major role when we are concerned with the business in that country, especially on the behalf of foreign investment and multinationals or global organizations. This is due to the fact that the political environment in the country determines the number of relevant factors for major businesses such as the taxation policies, the trade policies, industry quota, consumer outlook, establish a new economic system which results in a change in the purchasing potential of the consumers.

All the above factors and more affect how a company can function in the given country drastically since it results in the processes where the company tends to face intense competition from the local businesses as a result of the practices and taxes levied in the foreign businesses over the need to protect the domestic businesses as well. Investors, therefore, may find it hard to convince themselves to invest in such a business where the political change has caused a number of variables to potentially become hard to benefit from, or the fact that this may have caused market volatility which needs to be stabilized before an investment loan can be brought to perspective.


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