Foreign investment is the act of an individual or corporation, or institutional investor, acquiring a large stake in a company, which may be a controlling or non-controlling interest.
When it is a controlling interest, it is known as Foreign Direct Investment (FDI). Foreign corporate expansion in terms of newly acquired domestic facilities and equity interest in domestic companies tends to be monitored by domestic governments.
There are a few ways that a company can enter foreign markets: exporting, licensing agreements with companies in other countries for distribution (and client acquisition), joint ventures with domestic corporations, non-controlling interest in domestic corporations (foreign portfolio investment), and what’s called foreign direct investment, in which wholly owned subsidiaries are established either through the launch of new ventures or by establishing controlling interest in an already-established company in the new market.
Non-controlling interests, which, again are often called foreign portfolio investments (or FPI), which tend to be categorized as an interest of less than 10% of a corporation, are monitored by domestic governments, and their aggregate cash flows are referred to as portfolio flows, in which equity interests from one country are surrendered for equity interests in other countries. If a country has positive portfolio flow, this can be seen as a good thing.
Some countries have restrictions which entirely prevent foreign direct investment, and the other options may be the only ones available to a company. Other countries might allow FDI but will only allow it with what are known as performance requirements. Performance requirements are put in place to attempt to offset any potential negative effects of the foreign investment and to maximize the positive impact on the country’s economy.
Examples of requirements might include stipulations about the number of domestic workers that must be hired, the minimum or maximum amount of importing or exporting that must be done by the company, requirements for transfer of technology (ToT), and so on. It is more likely that an emerging market country will feel entitled to ask for performance requirements.
Foreign Direct Investment can be seen as free market capitalism, particularly when not encumbered by performance requirements, but research suggests that in many cases it is not efficient or especially beneficial for the developing economy, so there is some debate about how to allow large companies to operate across borders without barring market entry and draining the country of talent and resources, among other problems. In plenty of cases, FDI is healthy and beneficial.
SIMPLEs allow higher employee deferrals than most retirement accounts. A of 2015, they are able to defer up to $12,500
As of 2016, workers who have not registered online will receive a letter every 5 years that contains a statement
It is believed that the asset allocation decision is responsible for a majority of an investor’s returns (direct correlation)
A loss refers to reduction in the value of an investment, or in business terms, to having expenses outweigh revenues
A fixed income security is one designed to pay interest/coupon payments on a predetermined basis, or a fixed schedule
A callable bond, also known as a “redeemable bond,” is one where the issuer has the ability to pay off the debt prior...
Delta hedging is bringing the delta of a portfolio to zero, or closer to it, by purchasing financial instruments like options
Profit margin is a profitability ratio that measures, as a percentage, how much a company keeps per sale
Mortgage modifications are arrangements agreed to by the lender that are outside of the contractual mortgage agreement
It used to be that litecoin mining could only be done by GPU, but now ASIC machines are getting all the glory