Foreign Direct Investment (FDI)

Foreign Direct Investment is an investment made by a foreign individual, company or government that establishes a controlling or lasting management interest, conventionally defined by the World Bank as ownership of at least ten percent of the voting stock, in an enterprise operating in another country, distinguishing it from a foreign portfolio investment that involves no such control. It takes forms including cross border mergers and acquisitions, the construction of new facilities abroad, the reinvestment of profits earned by an existing overseas operation, and loans between related companies across borders. Flows and stocks of foreign direct investment are tracked as an indicator of how attractive a country is to international capital and of the degree to which its economy is integrated with the rest of the world.