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What is Country Risk? John Spacey, updated on
Country risk is the potential for losses due to investments or business activities in a particular country. Each country has a different risk profile with some nations having a highly stable political process and mature economy and others that have unstable politics and severe economic fluctuations. The following are a few types of country risk.
1. Political RiskThe risk that political events or conditions will result in losses. In extreme cases, political events can completely disrupt business activity in a country for an extended period of time.2. Taxation RiskThe risk of a change in tax law or interpretations. Unexpected changes in tax law can drive down asset prices. New tax regulations can also make it difficult or prohibitively expensive to operate a business in a particular country.3. Exchange Rate RiskInvesting or operating a business in a foreign country may expose you to exchange rate risk.4. Economic RiskExposure to the economic conditions of the country such as recessions, inflation and credit conditions.RiskThis is the complete list of articles we have written about risk.If you enjoyed this page, please consider bookmarking Simplicable.
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