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10+ Foreign Direct Investment Templates in DOC | PDF

A Foreign Direct Investment (FDI) refers to  a development in the form of a controlling stake in a company in one country by an individual located in another country. Hence, a notion of direct control distinguishes it from an investment in foreign portfolios. The source of the investment will not affect the concept, as an FDI: the investment can either be made “inorganically” by purchasing a company in the destination country or “organically” by extending the activities of an existing company in that region.

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10+ Foreign Direct Investment Templates in DOC | PDF

1. Foreign Direct Investment and Economic Growth

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2. Foreign Direct Investment Template

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3. Concept Note on Foreign Direct Investment

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4. Foreign Direct Investments in Real Estate

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5. Foreign Direct Investment And Host Count

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6. FDI and Labour Markets

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7. Fact Sheet on Foreign Direct Investment

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8. Foreign Direct Investment and Performance Requirement

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9. Foreign Direct Investment Net Flows

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10. Foreign Direct Investment Sample

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11. Foreign Direct Investment Example

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Methods and Types of Foreign Direct Investment

There are several methods with the help of which a foreign investor can make a direct investment from abroad. Investors might be able to expand their business in another country. They may also acquire voting stocks from a company located outside their country. A few of these methods include:

  1. Takeovers and mergers
  2. Obtaining electoral stocks at a company based in another country.
  3. Partnerships with overseas-based companies.
  4. Creating an international subsidiary of a domestic company.

There are several types of foreign direct investments that a company can make use of:

Horizontal Foreign Direct Investment:

A company extends its inland activities to another country under this form of FDI. The business carries out the same operations but in a foreign country.

Vertical Foreign Direct Investment:

A company moves into another country in this case by moving to a different point of the supply chain. Thus the company undertakes various activities overseas but these activities are linked to the main business.

Conglomerate Foreign Direct Investment:

A corporation undertakes unrelated business operations in a foreign country under this form of FDI. This form is unique in that it entails the challenge of entering a new nation and a whole new market.

Platform Foreign Direct Investment:

In this type of foreign direct investment, a company is expanding into another region, but the business production is then exported to a third country.

Advantages of Foreign Direct Investment

1. It provides multiple locations with local economic benefits:

The businesses or individuals participating in FDI would foster regional economic growth at the local level for their headquarters or home. Sometimes, gains are invested back into staff or improved corporate incentives, which can increase employment and then create new opportunities for FDI. The investments always do the same for the international organization’s home market.

2. This facilitates the completion of international trade:

Many nations have tariffs on imports which are payable for goods and services. Because of those taxes, import/export companies can struggle to keep products at affordable prices for customers. As a minimum stake in a foreign organization occurs, it becomes possible to limit or eliminate these tariffs via FDI. That offers more control over the market to local businesses while retaining price competition.

3. Foreign revenue can go up:

Most foreign markets have wage-earning workers who in the United States would be considered poverty pay. A majority of the population receives under $4 an hour. Some world markets provide under $1 per hour. Foreign revenue concentrations can be boosted with the help of FDI. Worker wages will also increase. That creates new tools that can help communities start to grow.

4. It’s making human resources healthier

Firms are effective because people possess the know-how of stuff. Human skills in the underdeveloped and developing world are limited to basic labor, agricultural labor, and other skills at the entrance level. The foreign direct investment provides opportunities for education so that people can develop their personal base of skills. Higher wages can be gained with better skills. Bigger rates of productivity are reached. Like the client, the company benefits and that trickles down on every society.

5. It allows you to work better with your money:

A lot of governments have put tax incentives on this type of investment to attract FDI. This makes more money available to work for a foreign company without significantly affecting the budget of the investing organization. Such benefits make reaching targets simpler as the money involved can be diverted to infrastructure rather than government coffers.

 Disadvantages of Foreign Direct Investment

1. It does not allow domestic investments:

A reasonable level investment of 10 percent in a foreign firm is money that doesn’t go into domestic companies. Although money returns with FDI to local communities, the value of local investment is nearly another $1 for each dollar spent. This implies that a domestic investment of $10,000 in the future could be worth $20,000 or more.

2. It involves several risks:

Global economic instability implies that the economic environment can alter at any given point in time. Even though individuals and companies choose small-risk foreign organizations, there can never be a complete risk elimination done from the transaction.

3. It might be overpriced:

The dollar in the US is one of the world’s most powerful currencies. The value of the dollar can be extended more than it would be locally for a venture into the developing countries. Although, that is not always the case as the euro and the pound trade exceed the dollar.

4. It can influence the exchange rates for currencies:

After a foreign direct investment, a developing country with a struggling currency may see a surge of popularity. People and businesses see investment as a sign of stability, creating additional interest in the market under investigation.

5. It might result in exploitation:

Foreign direct investment can be used on a variety of levels. A foreign government could opt to take over the investment. They might seize assets or proprietary information for political purposes. The foreign firm could take on the investment and waste it.

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