Tuesday, March 24, 2009

Factors Affecting Foreign investment Decision

Types of Foreign Investment
(1)Foriegn Direct Investment: which involves
(a)Whooly owned subsidiary
(b)Joint venture

(2)Foriegn Portfolio Investment
(a)Investment by FIIs
(b)Investment in GDRs, FDRs, FCCBs etc.

Factors Affecting Foreign investment Decision

(1) Stable, predictable macro economic policy.
(2) An effective and honest government.
(3) A large and growing market.
(4) Freedom of activity in the market.
(5) Minimal government regulation.
(6) Property rights at1d protection.
(7) Reliable 'infrastructure:
(8) Availability of high-quality factors of production.
(9) A strong local currency.
(10) The ability to remit profits, dividends and interest.
(11) A fayourable tax climate.
(12) Freedom to operate between markets