1. FOREIGN DIRECT INVESTMENTS
PRO & CONS

2. Foreign direct investment is the direct investment into a business or sector by a
company or individual from another country, differing from portfolio investment,
which is a more indirect investment into another country's economy
by means of financial instruments such as stocks and bonds.

3. There are various forms and levels of foreign direct investment,
depending on the type of company or companies involved,
and the reasons for investment.
Buy a company in the target country
through merger or acquisition
Set up a new business Expand the operations of an
existing business
Other forms of direct foreign investment include the incorporation of a wholly owned subsidiary or company, the acquisition
of shares in an associated enterprise, or participation in an equity joint venture across international boundaries.

4. ADVANTAGES OF FOREIGN DIRECT INVESTMENT
It can stimulate the economic development of the country in which the investment is made,
creating both benefits for local industry and a more conducive environment for the investor.

5. ADVANTAGES OF FOREIGN DIRECT INVESTMENT
It will usually create jobs and increase employment in the target country.

6. ADVANTAGES OF FOREIGN DIRECT INVESTMENT
It will enable resource transfer, and other exchanges of knowledge whereby
different countries are given access to new skills and technologies.

7. ADVANTAGES OF FOREIGN DIRECT INVESTMENT
The equipment and facilities provided by the investor can increase
the productivity of the workforce in the target country.

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9. DISADVANTAGES OF FOREIGN DIRECT INVESTMENT
Foreign direct investment can sometimes hinder domestic investment, as it focuses
resources elsewhere.
Occasionally as a result of foreign direct investment exchange rates will be affected, to the
advantage of one country and the detriment of the other.
Foreign direct investment may be capital-intensive from the investor's point of view, and
therefore sometimes high-risk or economically non-viable.
The rules governing foreign direct investment and exchange rates may negatively affect the
investing country.
Investment in certain areas is banned in foreign markets, meaning that an inviting
opportunity may be impossible to pursue.

10. CONCLUSIONS
Expanding your business abroad, buying into a foreign company or otherwise investing
into another country’s economy can be extremely financially rewarding, and may provide
your organisation with the boost it needs to jump to a new level of success.
However, direct foreign investment is also fraught with risks, and it is vital to investigate
and assess the economic climate thoroughly before venturing into such an investment.
We live in an increasingly globalised economy, which means that foreign direct investment
is becoming a more and more accessible option. Potential foreign direct investors,
with the right expertise and planning, will find that the world is their oyster.

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