INTRODUCTION Contributed by: G. J. Ligelis Jr, Cravath, Swaine & Moore LLP
tions, formation of partnerships and joint ventures and significant minority investments. Since other resources effectively cover the key con - siderations for owning or operating a business in various countries (see the Chambers Global Practice Guide, Doing Business In... 2025), this Guide focuses on those types of investment transactions and not the establishment and operation of new greenfield busi - nesses in the subject country. Key Developments Over the course of the last year, FDI flows have been buffeted by three key developments: • geopolitical tensions; • the return of industrial policy, tariffs and protection - ism; and • the continued expansion of national security review regimes and other national interest-driven policies. Geopolitical tensions In the wake of the severe disruption caused by the COVID-19 pandemic that affected every corner of the world, a seemingly endless cascade of geopolitical crises has continued to buffet and shape the flows of trade and investment. As decades of globalisation worked to gradually knit economies in vastly different geographies and stages of economic development together, the shocks of these crises continue to tear at those bonds as countries and companies alike seek to align themselves with more secure and familiar trad - ing partners. Since Hamas’ attack on Israel in October 2023, humanitarian, security and geopolitical crises con - tinue to unfold as part of the ensuing war in Gaza. With escalations in the conflict between Israel and Hezbollah in Lebanon (albeit subject to the cease - fire reached in November 2024) and the bombing of Hamas leadership in Qatar, as well as direct missile attacks between Israel and Iran, and Israel and the USA bombing Iran’s nuclear facilities, the risks of an expanded conflict in the region remain high. However, hope has begun to emerge for a more peaceful future following the ceasefire between Israel and Hamas in October 2025.
Russia’s war in Ukraine, which commenced in Feb - ruary 2022, along with Russia’s escalating threats to neighbouring European countries through incursions into NATO airspace and the USA’s subsequent sanc - tions on major Russian oil companies, continues to affect global energy markets, impacting oil, gas and electricity prices around the world. European coun - tries that decoupled from Russia continue to seek alternatives to cheap Russian gas, pivoting to exports of liquified natural gas from the USA, among other sources. Meanwhile, in 2025, tensions between the USA and China continued to affect their bilateral relationship, as the two global powers settled into a high-stakes relationship of strategic competition on a global scale. The risk of a military confrontation in the South Chi - na Sea, the East China Sea or elsewhere regularly makes headlines, forcing businesses to consider how to disentangle supply chains, consumer markets and investments in the region should a full-blown crisis erupt. Against the backdrop of multiple international crises and rising geopolitical tensions, firms and policymak - ers have been responding with strategies to make supply chains less vulnerable to geopolitical tensions by moving production to trusted countries. According to the IMF, over the past decade, FDI flows have been increasingly concentrated in geopolitically aligned countries, especially in strategic sectors, such as semiconductors, in an effort to make supply chains less vulnerable to geopolitical tensions. If such tensions continue to intensify and countries further diverge along geopolitical fault lines, FDI flows may become even more concentrated within blocs of aligned countries centred around the USA and China. Partly in response to these tensions and US trade poli - cies, 2024 and 2025 saw the BRICS expand into the “BRICS Plus”, with the addition of five new member states and ten additional partners, along with other new BRICS applicants and invitees. It remains to be seen how FDI fragmentation between US-centred and China-centred geopolitical blocs will impact econo - mies that remain unaligned with either camp, par - ticularly in emerging and developing economies such as India and Latin America. For example, in October
7 CHAMBERS.COM
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