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Foreign direct investment (FDI)or foreign investment refers to long term participation by
country A into country B. It usually involves participation in management, joint-venture,
transfer of technology and expertise. There are two types of FDI: inward foreign direct
investment and outward foreign direct investment, resulting in a net FDI inflow (positive or
negative) and "stock of foreign direct investment", which is the cumulative number for a
given period. Direct investment excludes investment through purchase of shares.[1]

Contents
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 1 History
 2 Types
 3 Methods
 4 Foreign direct investment in the United States
 5 Foreign direct investment in China
 6 Foreign direct investment in India
 7 Foreign direct investment and the developing world
 8 See also
 9 References
 10 External links

[edit] History
(FDI) is a measure of foreign ownership of productive assets, such as factories, mines and
land. Increasing foreign investment can be used as one measure of growing economic
globalization. Figure below shows net inflows of foreign direct investment. The largest flows
of foreign investment occur between the industrialized countries (North America, Western
Europe and Japan). But flows to non-industrialized countries are increasing sharply.

US International Direct Investment Flows:[2]

Period FDI Outflow FDI Inflows Net

1960-69 $ 42.18 bn $ 5.13 bn + $ 37.04 bn
1970-79 $ 122.72 bn $ 40.79 bn + $ 81.93 bn
1980-89 $ 206.27 bn $ 329.23 bn - $ 122.96 bn
1990-99 $ 950.47 bn $ 907.34 bn + $ 43.13 bn
2000-07 $ 1,629.05 bn $ 1,421.31 bn + $ 207.74 bn
Total $ 2,950.69 bn $ 2,703.81 bn + $ 246.88 bn

[edit] Types
A foreign direct investor may be classified in any sector of the economy and could be any
one of the following:[citation needed]

 an individual;
 a group of related individuals;
 an incorporated or unincorporated entity;
 a public company or private company;
 a group of related enterprises;
 a government body;
 an estate (law), trust or other societal organisation; or
 any combination of the above.

[edit] Methods
The foreign direct investor may acquire voting power of an enterprise in an economy through
any of the following methods:

 by incorporating a wholly owned subsidiary or company

 by acquiring shares in an associated enterprise
 through a merger or an acquisition of an unrelated enterprise
 participating in an equity joint venture with another investor or enterprise

Foreign direct investment incentives may take the following forms:[citation needed]

 low corporate tax and income tax rates

 tax holidays
 other types of tax concessions
 preferential tariffs
 special economic zones
 EPZ - Export Processing Zones
 Bonded Warehouses
 Maquiladoras
 investment financial subsidies
 soft loan or loan guarantees
 free land or land subsidies
 relocation & expatriation subsidies
 job training & employment subsidies
 infrastructure subsidies
 R&D support
 derogation from regulations (usually for very large projects)