Foreign Direct Investment - Methods

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:

  • low corporate tax and individual income tax rates
  • tax holidays
  • other types of tax concessions
  • preferential tariffs
  • special econo'''mic zones
  • EPZ – Export Processing Zones
  • Bonded Warehouses
  • Maquiladoras
  • investment financial subsidies
  • soft loan or loan guarantees
  • free land or land subsidies
  • relocation & expatriation
  • infrastructure subsidies
  • R&D support
  • derogation from regulations (usually for very large projects)

Read more about this topic:  Foreign Direct Investment

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