How can a global entrepreneur mitigate potential political and legal risks prior to them happening?
What will be an ideal response?
The first manner of prevention is knowledge of the situation. An entrepreneur needs to fully research and understand the market that they are entering and the political and economic conditions taking place there. If it looks like there might be a high level of risk, they should avoid the market from the outset.
If they determine that the potential benefits outweigh the potential risks, they can help to mitigate their risks by taking out insurance to guard them against any problems. Though no insurance will ever be able to fully protect them from all situations, it can help when the worst takes place. In the United States, firms can take insurance from the Overseas Private Investment Corporation (OPIC) to protect them from currency inconvertibility, expropriation of their business by the local government, or political violence that brings damage to their facilities or employees. Many private insurers also write insurance for political risk, though often at a higher cost.
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