FDI 3

FOREIGN DIRECT INVESTMENT.

FOREIGN DIRECT INVESTMENT IS DEFINED AS AN INVESTMENT BY A RESIDENT ENTITY IN ONE ECONOMY THAT REFLECTS THE OBJECTIVE OF OBTAINING A LASTING INTEREST IN AN ENTERPRISE RESIDENT IN ANOTHER COUNTRY.

THE LASTING INTEREST IMPLIES THE EXISTENCE OF A LONG-TERM RELATIONSHIP BETWEEN THE DIRECT INVESTOR AND THE ENTERPRISE AND A SIGNIFICANT DEGREE OF INFLUENCE BY THE DIRECT INVESTOR ON THE MANAGEMENT OF THE ENTERPRISE.

THE OWNERSHIP OF AT LEAST 10% OF THE VOTING POWER, REPRESENTING THE INFLUENCE BY THE INVESTOR, IS THE BASIC CRITERION USED.

FDI IS A KEY ELEMENT IN INTERNATIONAL ECONOMIC INTEGRATION.

FDI CREATES DIRECT, STABLE AND LONG-LASTING LINKS BETWEEN ECONOMIES.

IT ENCOURAGE THE TRANSFER OF TECHNOLOGY AND KNOW-HOW BETWEEN COUNTRIES, AND ALLOWS THE HOST ECONOMY TO PROMOTE ITS PRODUCTS MORE WIDELY IN INTERNATIONAL MARKETS.

FDI IS ALSO AN ADDITIONAL SOURCE OF FUNDING FOR INVESTMENT AND, UNDER THE RIGHT POLICY ENVIRONMENT, IT CAN BE AN IMPORTANT VEHICLE FOR ENTERPRISE DEVELOPMENT.

SOURCE : OECD FACTBOOK – ECONOMIC, ENVIRONMENTAL AND SOCIAL STATISTICS – 2011-2112-

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