Foreign Direct Investment Policies

By: EconomyWatch   Date: 29 June 2010

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The foreign direct investment policies are the various rules and regulations that have been laid down by the various countries in order to regulate the overseas investment that is being made in a country.

The foreign direct investment policies take an important part in determining the amount of foreign direct investment that comes in a country. These policies play an important part in the decision making process of the foreign direct investors.

They are normally affected by the foreign direct investment policies that are in place in a country and make their decision based on these policies. If the policies are suitable enough for the companies they go ahead with their investment.

The foreign direct investment policies provide the various conditions under which foreign direct investment may be made in a country. They also state the various situations where exception would be made to the allowances that are provided to the foreign direct investors.



The foreign direct investment policies are reviewed on a regular basis. The changes that are made to the policies are also notified through a variety of means like the press notes for example. There is also some mention in the policies about the various ways in which foreign direct investment may be made in various sectors.

There are certain conditions where the investors need to seek permission from the various authoritative figures like the national government or any other entity that is responsible for looking after the various affairs that are related to foreign direct investment.

The foreign direct investment policies are made mainly by entities that are responsible for looking after the matters related to foreign direct investment in a country. The policies may also be formulated by organizations that are meant to promote the country as foreign direct investment destination. There are certain objectives behind the foreign direct investment policies. The makers of these policies have two broad objectives – to promote the investment opportunities that are present in the country to the overseas investors and strike a balance between the overseas and local investors.

These policies also have various proposals that are made in order to improve the policies that are in place for administering the foreign direct investment policies. These proposals are important as they help in improving the foreign direct investment policy situations and amend them so that they can appeal to the overseas investors. This would lead to an increase in the foreign direct investment that is coming into the country. The foreign direct investment policies also state the various areas where a country's government would not allow foreign direct investment to be made. Some of those areas are real estate and housing, gambling, lottery business, betting and chit funds for example.

Certain countries have formulated a number of foreign direct investment acts. These acts lay down the various conditions where certain companies have to seek permission from important authorities in order to receive foreign direct investment of any form and shape. There are certain companies that are granted such permissions but only after they complete certain formalities.

These formalities also need to be observed even after the permission has been provided to these companies as far as foreign direct investment is concerned. The various options in which an overseas investor can gain entry into the market of a country for the purposes of making foreign direct investment are also mentioned in these foreign direct investment policies.

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