A survey by Norton Rose, the City law firm, has found that despite the recent rush of cross-border takeovers, in-house lawyers say such deals have become more difficult to do.
They cite higher levels of regulation and the potential pitfalls of an unfamiliar legal system as the big obstacles to deals.
Some are so worried about the risk of being penalised by foreign lawmakers that they would avoid certain jurisidictions “so as to remove the reputational threat that any vague connection to corrupt practices might pose to their corporate reputations”, the survey said.
The biggest regulatory burdens were thought to be competition rules, including European merger law, and the requirements of Sarbanes-Oxley in America. Yet 41% of respondents admitted that they did not have global compliance systems in place.
The legal chiefs said China was the toughest environment for deals “because of its underdeveloped legal framework and complex bureaucracy”. Next most difficult were America, France and Russia.