INTRODUCTION Contributed by: Philip Tully, Matheson LLP
Introduction The seventh edition of Chambers Global Prac - tice Guides: Doing Business In... is issued with the world’s economy facing significant uncer - tainty against a backdrop of ongoing economic and political crises. Economic growth is weaker in 2025 than origi - nally anticipated and forecasts are markedly down compared to 2024. Decreases in inflation have stalled and ongoing geopolitical tensions have contributed to the uncertain outlook. One of the key trends that has emerged in 2025, and a significant contributing factor to economic activity being depressed and investment deci - sions being stalled, is the trade tensions that have developed amongst the world’s largest trading partners. One key feature of the first half of 2025 has been the implementation by the new US administration of a number of significant tariff policy positions in advance of trade negotiations with a number of partners. This has triggered a departure from the relative stability of the global trade framework of the past century, resulting in increased uncer - tainty for businesses and policymakers globally. This year has also seen a general decline of mul - tilateralism in international policy matters and a rise in focus on regional interests as nations reassess and re-orientate their priorities, in some cases adopting more protectionist policies. This can be seen in the area of international taxa - tion, where OECD members have thus far failed to reach agreement on the OECD’s Two Pillar solution to reform international tax rules for the digital age. While some countries, including the EU member states, have implemented a minimum 15% tax
(in line with the OECD’s Pillar Two proposals), certain aspects of these rules are now subject to doubt following confirmation from the US administration that they will not implement the Pillar Two rules but instead want a safe harbour to ensure that the US tax system sits side-by- side with the Pillar Two tax regime. Negotiations on the OECD’s Pillar One frame - work have stalled, increasing the possibility for further destabilisation and fragmentation in the international tax framework as certain jurisdic - tions consider implementing digital services taxes and other unilateral tax measures, even in light of potential retaliation from the US. Despite this volatile macro-environment, busi - nesses and investors are proving resilient. One welcome development of the past 12 months has been a much-needed refocus by govern - ments, particularly in Europe, on competitive - ness and specifically on simplification measures and de-regulation. As governments respond to these macro challenges and seek to encourage growth, 2025 has seen the emergence of a will - ingness to reduce compliance and administra - tive burdens. In Europe, the EU Commission is seeking to address recommendations from the recent Draghi report on competitiveness. The Commis - sion is aiming to reduce administrative burdens by 25% by 2029 and has started adopting a number of proposals to make the EU’s econo - my more competitive by eliminating overlapping, unnecessary or disproportionate measures that create barriers for EU companies. Looking ahead at key trends in the business environment, the speed of technological change and the rise of generative AI offers hope of gen - erating opportunities for businesses but may
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