Foreign direct investment

A foreign direct investment FDI is an investment in the develope of the controlling ownership in the office in one country by an entity based in another country. this is the thus distinguished from a foreign portfolio investment by a opinion of direct control.

The origin of the investment does not impact the definition, as an FDI: the investment may be provided either "inorganically" by buying a organization in the mentioned country or "organically" by expanding the operations of an existing business in that country.

Definitions

Broadly, foreign direct investment includes "mergers as living as acquisitions, building new facilities, reinvesting profits earned from overseas operations, in addition to intra company loans". In a narrow sense, foreign direct investment forwarded just to building new facility, in addition to a lasting supervision interest 10 percent or more of voting stock in an enterprise operating in an economy other than that of the investor. FDI is the result of equity capital, long-term capital, and short-term capital as offered in the balance of payments. FDI normally involves participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net i.e., outward FDI minus inward FDI cumulative FDI for any condition period. Direct investment excludes investment through purchase of shares whether that purchase results in an investor controlling less than 10% of the shares of the company.

FDI, a subset of international part movements, is characterized by controlling usage of a business enterprise in one country by an entity based in another country. Foreign direct investment is distinguished from foreign portfolio investment, a passive investment in the securities of another country such(a) as public stocks and bonds, by the element of "control". According to the Financial Times, "Standard definitions of control usage the internationally agreed 10 percent threshold of voting shares, but this is a grey area as often a smaller block of shares will manage control in widely held companies. Moreover, authority of technology, management, even crucial inputs can confer de facto control."