Play N' Learn - Global Business Development - Travis Vu Nguyen Khanh Duy.pdf

Foreign Direct Investment, or FDI, is when a company from one country invest their business interests into a foreign nation or corporation. It could also occur when an investor establishes business operations overseas or even acquire assets of a foreign firm. Nevertheless, FDIs are slightly distinguished from portfolio investments where investors simply purchase foreign-based equities and hold the securities, FDI involves management more than just capital with the intention of obtaining a lasting interest through expansion and development (Chen, 2020). Most of the time, FDI are made in open economies consisting of a highly-skilled workforce, loose regulations, and attractive growth prospects. Benefits of foreign direct investments include tax incentives, lower labor costs, subsidies, preferential tariffs, and market diversification.