Foreign direct investment (FDI) in its classic form is defined as a company from one country making a physical investment into building a factory in another country. It is the establishment of an enterprise by a foreigner. More specifically, Foreign direct investment is a cross-border corporate governance mechanism through which a company obtains productive assets in another country. Its definition can be extended to include investments made to acquire lasting interest in enterprises operating outside of the economy of the investor. The FDI relationship consists of a parent enterprise and a foreign affiliate which together form an international business or a multinational corporation (MNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The IMF defines control in this case as owning 10% or more of the ordinary shares or voting power of an incorporated firm or its equivalent for an unincorporated firm; lower ownership shares are known as portfolio investment.

Welcome to CWAnswers

CWAnswers is your guide to the sprawling world wide web. The directory aims to provide a useful guide made by users. You can share your knowledge as well - simply register and edit your first entry. For questions just contact the team at support - at - cwanswers.com.

Weblinks

Top 10

Things you find nowhere else.

Comments