[authors: Thomas (Jeff) Jefferson, Jonathan Young]*
1. What is the current business climate in your jurisdiction including major political, economic and/or legal activities on the horizon in your country that could have a big impact on businesses?
The U.S. economy continues to be an active climate for investment transactions and the M&A market, and we expect that to continue. Overall, the financial market has sustained even through a change in administration and a pandemic.
As far as legal activities on the horizon, cybersecurity continues to be on the rise. As businesses increasingly rely on technology and digital information, they face a greater risk of privacy, cyber litigation, and regulatory enforcement actions. Just recently, Locke Lord has been retained by two Fortune 500 companies to handle a data breach.
2. From what countries do you see the most inbound investment? What about outbound?
In working with other WLG firms, we see most inbound investments coming from Australia, China, Germany, Canada, and Scandinavia. The outbound investment is more dependent on the type of transaction. We mainly partner on transactional matters with WLG firms in Europe, Canada, and Australia.
3. In what industries/sectors are you seeing the most opportunity for foreign investment?
Massachusetts' wealth of medical schools and prestigious higher education institutions have formed the basis of a thriving biotech ecosystem, which continues to attract foreign investment. The biotechnology sector is on target to grow exponentially by 2024. Software and IT services continue to be strong industry sectors as well.
Some of Connecticut's most prominent manufacturers are focusing on research and development, increasing the R&D tax credit.
4. What advantages and pitfalls should others know about doing business in your country?
Overall, M&A activity continues to see an uptick in deals, and it is very much a “sellers’ market.” Some auctions for the sale of a business move exceptionally quickly, and buyers often try to preempt the auction process by getting ahead of the timeline set by the investment bankers. Bidders who are not prepared to move quickly run the risk of being left behind.
Organizations continue to face new issues, regulations, and threats relating to privacy and cybersecurity. Unlike the EU, the United States has no single federal law that regulates information security, cybersecurity, and privacy throughout the country. Several states have their own cybersecurity laws in addition to data breach notification laws. These areas are regulated by a patchwork of industry-specific federal laws and state legislation, with varying scope and jurisdiction. As a result, the challenge for organizations that conduct business across all 50 states and potentially across the world is considerable.
5. What is one cultural fact or custom about your country that others should know when doing business there?
Americans are very friendly and personable people in business. We cultivate a casual business environment that makes partners feel comfortable enough to trust us and share their position. We are increasingly becoming more informal in our tone of communication. Communications are often brief. Clients often expect an instantaneous response to emails or texts, particularly when a transaction moves quickly.
*Locke Lord LLP