chart of foreign direct investments
By Davy Karkason
Founding Attorney

Investing in foreign markets can provide an opportunity for significant gains, but it also comes with inherent risks. Foreign Direct Investments (FDIs) are a popular form of international investment, allowing businesses to establish operations or acquire assets in other countries. However, sometimes these investments can lead to financial losses, leaving investors wondering if there’s a way to recover their funds. 

In this article, we’ll discuss the steps you can take to pursue the recovery of lost money in an FDI and how the legal team at Transnational Matters can assist you throughout the process.

Understanding the Causes of Lost Funds in FDIs

To effectively recover your lost funds, it’s crucial to understand the cause of your losses. Some common reasons for losses in FDIs include:

  • Political risk: Changes in political climate or government policies can impact the business environment and negatively affect your investment.
  • Currency risk: Fluctuations in exchange rates can lead to financial losses.
  • Legal risk: Changes in local laws or regulations can impede your ability to operate or maintain your investment.
  • Operational risk: Mismanagement or inefficiencies within the foreign business can result in losses.

Assessing Your Legal Options

Once you have identified the cause of your losses, it’s time to explore your legal options for recovery. Depending on the circumstances of your investment and the jurisdiction involved, you may have several avenues for recourse:

  • Contractual remedies: Review the terms of your investment contract to determine if you have any rights or remedies under its provisions. This may include arbitration clauses, indemnification provisions, or other terms that address potential losses.
  • Local litigation: Pursuing a lawsuit in the jurisdiction where the investment took place might be an option. Local courts can provide remedies such as monetary damages or specific performance to rectify the situation.
  • International arbitration: If the investment agreement includes an arbitration clause, you can seek redress through an international arbitration forum. This process can be more efficient and neutral compared to local litigation.
  • Bilateral investment treaties (BITs) and multilateral agreements: Some countries have signed BITs or other agreements that protect foreign investors. These treaties can provide additional legal avenues for pursuing recovery.

Engaging a Qualified Legal Team

Navigating the complexities of international law can be daunting, and it’s crucial to have experienced legal representation on your side. Transnational Matters has a team of skilled attorneys who handle international investment disputes on a regular basis, and they can help you:

  • Evaluate the strength of your case: Our attorneys will carefully review the details of your investment and advise you on the best course of action.
  • Develop a comprehensive strategy: We will create a tailored strategy for pursuing recovery, taking into consideration the unique factors of your case and the jurisdiction involved.
  • Represent your interests: Our team will advocate for you in negotiations, litigation, or arbitration, ensuring your rights as an investor are protected.
  • Maximize your chances of recovery: With our extensive experience and knowledge of international investment law, we will work diligently to achieve the best possible outcome for your case.

Recovering lost funds from a foreign direct investment can be a complex and challenging process, but with the right legal representation, it is possible. If you have experienced losses in an FDI and need assistance, contact Transnational Matters to discuss your options and take the first steps toward recovery.

About the Author
As a lawyer and the founder of Transnational Matters, Davy Aaron Karkason represents numerous international companies and a wide variety of industries in Florida, the U.S., and abroad. He is dedicated to fighting against unjust expropriation and unfair treatment of any individual or entity involved in an international matter. Mr. Karason received his B.A. in Political Science & International Relations with a Minor in Criminal Justice from Nova Southeastern University. If you have any questions about this article you can contact Davy Karkason through our contact page.