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Abstract
Foreign direct investment (FDI) represents the acquisition by foreign residents of a controlling claim on firms (through equity) or on real estate, or further investment in an enterprise so controlled.1 It is the word “controlling” that distinguishes FDI from foreign portfolio investment, the other subcategory of private foreign investment.2 The System of National Accounts3 considers that a foreign investor controls a corporation or other asset if it owns 10 percent or more of the particular enterprise, rather lower than the 51 percent that is usually associated with the definition of a controlling interest.4 FDI itself is often divided into two further categories: mergers and acquisitions, in which an existing concern is bought; and “greenfield” investment, in which the enterprise is started from scratch.
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