Inward investment is the injection of money from an external source into a region, in order to purchase capital goods for a branch of a corporation to locate or develop its presence in the region.
A corporation is an organization, usually a group of people or a company, authorized by the state to act as a single entity and recognized as such in law for certain purposes. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration.
Foreign sources, such as transnational corporations or multinational corporations invest money by introducing new industrial sites to an area, in order to produce more of their product, sometimes in response to changes noticed in that area, such as a growing population or enhanced transport network. Inward investment creates jobs in an area and brings wealth into the economy.
A multinational corporation (MNC) or worldwide enterprise is a corporate organization that owns or controls production of goods or services in at least one country other than its home country. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise.
Some places do however attract inward investment due to their relative remoteness, for example a company wanting to recruit personnel with relatively common skills might deliberately relocate to an area where wage rates are relatively low, a factor that could arise because of the absence of similar jobs or localised underemployment. Some international investors might seek to take advantage of relatively lax regulation through investing abroad.
Underemployment is the under-use of a worker due to a job that does not use the worker's skills, or is part time, or leaves the worker idle. Examples include holding a part-time job despite desiring full-time work, and overqualification, where the employee has education, experience, or skills beyond the requirements of the job.
Some economic development agencies, governments or local authorities are occasionally accused of concentrating on attracting inward investment to such an extent that they neglect to nurture home-grown small businesses or entrepreneurs with exciting ideas. As with much marketing effort, a balance is often required to maximise economic progress that is socially and environmentally appropriate.
Another aspect of inward investment is financial inward investment activity, which rather than focusing on attracting "offshoot" operations of overseas companies, focuses on encouraging global focused overseas venture capitalist and hedge-fund investment into companies in a country or region.
Saint Lucia is one of the Windward Islands, a group of islands located off the southeast coast of North America. St Lucia's economy relies primarily on the sale of bananas, and the income generated from tourism, with additional input from small-scale manufacturing.
A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing, taxation, trading, quotas, customs and labour regulations. Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation.
The Overseas Private Investment Corporation (OPIC) is the United States government's development finance institution. It mobilizes private capital to help solve critical development challenges and, in doing so, advances the foreign policy of the United States and national security objectives.
Venture capital (VC) is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth. Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake, in the companies they invest in. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the firms they support will become successful. Because startups face high uncertainty, VC investments do have high rates of failure. The start-ups are usually based on an innovative technology or business model and they are usually from the high technology industries, such as information technology (IT), clean technology or biotechnology.
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.
Economic liberalization is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities; the doctrine is associated with classical liberalism. Thus, liberalization in short is "the removal of controls" in order to encourage economic development. It is also closely associated with neoliberalism.
Foreign ownership or control of a business or natural resource in a country by individuals who are not citizens of that country or by companies whose headquarters outside that country.
Foreign direct investment in Iran (FDI) has been hindered by unfavorable or complex operating requirements and by international sanctions, although in the early 2000s the Iranian government liberalized investment regulations. Iran ranks 62nd in the World Economic Forum's 2011 analysis of the global competitiveness of 142 countries. In 2010, Iran ranked sixth globally in attracting foreign investments.
The Northern Ontario Heritage Fund Corporation (NOHFC) is a Crown corporation and development agency of the Ministry of Northern Development and Mines in the Canadian province of Ontario, whose purpose is to provide funding and program support to foster economic development in the economically disadvantaged Northern Ontario region.
UK Trade & Investment (UKTI) was a UK Government department working with businesses based in the United Kingdom to assist their success in international markets, and with overseas investors looking to the UK as an investment destination. In July 2016 it was replaced by the Department for International Trade.
The United States EB-5 visa, employment-based fifth preference category or EB-5 Immigrant Investor Visa Program, created in 1990 by the Immigration Act of 1990, provides a method for eligible Immigrant Investors to become lawful permanent residents — informally known as "green card" holders — by investing at least $500,000 or $900,000 after November 21, 2019 to finance a business in the United States that will employ at least 10 American workers." Most immigrant investors who use the EB-5 program invest in a targeted employment area (TEA) — a rural area or area with high unemployment — which lowers the investment threshold to $500,000 or $900,000 after November 21, 2019. The EB-5 program is intended to encourage both "foreign investments and economic growth". The EB-5 Immigrant Investor Visa Program is one of five employment-based (EB) preference programs in the United States.
Between 1950 and 1960, the imperial government of Ethiopia enacted legislation and implemented a new policy to encourage foreign investment in the Ethiopian economy. This new policy provided investor benefits in the form of tax exemptions, remittances of foreign exchange, import and export duty relief, tax exemptions on dividends, and the provision of financing through the Ethiopian Investment Corporation and the Development Bank of Ethiopia. In addition, the government guaranteed protection to industrial enterprises by instituting high tariffs and by banning the importation of commodities that might adversely affect production of domestic goods. Protected items included sugar, textiles, furniture, and metal. The government also participated through direct investment in enterprises that had high capital costs, such as oil refineries and the paper and pulp, glass and bottle, tire, and cement industries. In 1963, with the Second Five-Year Plan under way, the government enacted Proclamation No. 51. The proclamation's objective was to consolidate other investment policies enacted up to that period, to extend benefits to Ethiopian investors, and to create an Investment Committee that would oversee investment programs. In 1966 the Ethiopian government enacted Proclamation No. 242, which elevated the Investment Committee's status as an advisory council to that of an authorized body empowered to make independent investment decisions. Thus, by the early 1970s, Ethiopia's industrialization policy included a range of fiscal incentives, direct government investment, and equity participation in private enterprises.
Foreign direct investments in Morocco grew to $2.57bln in 2007 from $2.4bln a year earlier to position the country in the fourth rank in Africa among FDI recipients. Although other studies have shown much higher figures.
The North of England Inward Investment Agency is a UK government sponsored agency that represents two regional development agencies (RDAs) in North England: Northwest Regional Development Agency (NWDA), One NorthEast (ONE) and Yorkshire Forward (YF). NoE’s primary function is to work as an ambassador to businesses and therefore attract targeted inward investment to the North of England region.
The Investment theory of party competition is a political theory developed by Thomas Ferguson, Emeritus Professor of Political Science at the University of Massachusetts Boston. The theory focuses on how business elites, not voters, play the leading part in political systems. The theory offers an alternative to the conventional, voter-focused, Voter Realignment theory and Median voter theorem, which has been criticized by Ferguson and others.
Based in Washington, D.C., the Organization for International Investment (OFII) is a trade association representing the interests of US subsidiaries of overseas corporations. OFII advocates for non-discriminatory treatment in the United States for its member companies.
The Economic Transformation Program is an initiative by the Malaysian government to turn Malaysia into a high income economy by the year of 2020. It is managed by the Performance Management and Delivery Unit (PEMANDU), an agency under the Prime Minister Department of Malaysia.
Immigrant investor programs are programs designed to attract foreign capital and business people by providing the right of residence and citizenship in return. These are also known as citizenship-by-investment programs or golden visa. While several countries currently offer investors citizenship or residence in return for an economic investment, the concept is relatively new and was only brought to the focus around 2006.
Foreign direct investments in Kosovo play an important role in the region's economy. However, this type of investment has historically been limited. Foreign sovereign investors in Kosovo primarily include regional European countries such as Germany, Turkey, Albania, Croatia, and Macedonia. A majority of foreign investment is concentrated in Pristina, with particular focus in the areas of banking, construction, and transportation.
The Moroccan automotive industry is led by investment by French Renault-Nissan Alliance and PSA Group car companies. BYD leads the Chinese investment in Morocco. Investment is encouraged by the Moroccan government by removing certain taxes in the first five years in order to encourage the companies to come. Fiat ended its production role in Morocco in 2003 by selling its stake in Somaca to Renault. There is a small local manufacturing industry including Laraki.
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