Connecting the Dots : Attracting Foreign Direct Investment through Harmonisation of European Insolvency Law

Considering the fact that participation in insolvency proceedings may be viewed as an entry-mode for investment in a foreign market, as well as a form of business wind-up, this paper investigates the relation between the quality of insolvency law and foreign direct investment in the European Union. Although foreign direct investments are a cardinal feature in the EU internal market, their definition is missing in the European Treaties. Similarly, despite insolvency laws being harmonized, substantial differences on national levels remain. Apart from an analysis of European Union law, these discrepancies are comparatively addressed by a confrontation of two fundamentally different Member States' jurisdictions – the traditionally business friendly jurisdiction of the United Kingdom and the dynamically evolving legal system of Slovakia. A focus on efforts striving for the perfection of national insolvency laws should deserve more attention as the economic decline, caused by an on-going financial crisis, has increased the number of insolvency proceedings and inflicted a drop in investment flows