Essay Foreign Direct Investment ( Fdi )
The investing company can make these investments in the following ways –
• By setting up a subsidiary or associate company in the foreign country
• By acquiring shares of an overseas company
• Through a merger or joint venture
As defined by the OECD, the threshold limit for FDI is 10%. That is, the foreign investor must own at least 10% or more of the voting stock or ordinary shares of the investee company.
A new report by the United Nations Conference on Trade and Development (UNCTAD) has shown that FDI inflows grew to $1.45tn in 2013. It became $1.6tn in 2014, is expected to grow to $1.75tn in 2015 and $1.85tn in 2016. FDI net inflow is the value of inward direct investment made by non-resident investors in an economy. FDI net outflow is the value of outward direct investment made by the residents of an economy to foreign economies.
FDI inflows to developing countries…