For many years,Romania promised all export-oriented foreign investors a five-year tax holiday if they set up a factory in Romania.Recently,this tax holiday was revoked.Now all foreign investors must pay the same taxes as local companies.Romania has just undergone ____.

Question

Quizplus · Accepted Answer

The revoking of the tax holiday promised to foreign investors indicates a change in government regulations. Therefore, the correct term to describe this situation is regulatory change. Confiscation would imply a seizure of assets or property, which is not the case. Domestication applies more to the process of adapting to local customs and practices, rather than a change in policies or regulations. Political risk may relate to a broader range of factors that could negatively impact foreign investments, such as instability, corruption or civil unrest. However, in this particular case, the issue is primarily about changes in tax policies.

For Many Years,Romania Promised All Export-Oriented Foreign Investors a Five-Year