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Mon 11 Jul, 2005 01:44 am
what is Foreign Direct Investment ? the term Direct investment is a misleading term to me. suppose , microsoft wants to invest money to our country for its developement centre....will it be a direct investment or indirect investment ?
i have some bad guess that if our Govt dont take taxes from the investing company then it will be called as a direct investment to our country. is it correct ?
may be i am totaly wrong.....can you explain a bit about what a direct investment means ?
thank you
i visited the link.....there are many big big jargon which is beyond my capability. the example i provided is that correct ? please explain it in simple words. i am an ordinary man.
If foreigners buy enough of a company to operate it, to decide how it is run, then that is foreign direct investment. If foreigners buy small positions in companies, not large enough for them to exert much influence over the companies operations, then that is foreign investment, but not directed.
Direct investment is when you invest enough in one company to take controll of it.
In other words, form your comment i can assume......
suppose my company(a foreigner) bought a big share (say 90%) of microsoft then its kind of direct foreign investment . else if we buy small share it would be called indirect foreign investment !....its so simple !!
thank you
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