Investments in the Territory of the Former German Democratic Republic—A Chance of Direction

This Article intends to analyze the major issues which come up in almost every transaction involving investments in the Former GDR. Part I briefly describes the law applicable to transactions in the Former GDR. Part II outlines the legal structure of enterprises in the territory of the Former GDR, the ownership of these enterprises, and questions relating to their balance sheets. Part III addresses the important question of restitution or compensation claims which may be asserted against such enterprises or the investor.

Part IV considers problems with which an investor in the Former GDR typically is confronted, mainly issues of environmental liability and the need to reduce the work force. Part V describes the protection of industrial property rights in the Former GDR. This Article concludes that a potential investor must be aware that although the Former GDR is now a part of the Federal Republic of Germany, he will be faced with novel and difficult legal issues. Only a thorough understanding of these issues will prevent costly mistakes and disappointments.