What is FDI?
Foreign Direct Investment (FDI) refers to an investment made by a company or individual from one country into a business or productive sector of another country.
Thank you for reading this post, don't forget to subscribe!- It involves not just the transfer of money but also technology, management skills, and business expertise. Through FDI, the foreign investor gains a significant degree of control or ownership in the host country’s business—typically 10% or more of the company’s shares.
- FDI is considered a long-term investment because it aims to establish a lasting interest in the host country, such as opening a new branch, building factories, acquiring existing companies, or forming joint ventures.
In simple terms, FDI means investment by a foreign company into another country to establish business operations or gain control in an existing business, helping promote economic growth, employment, and technology transfer.
Contribution/ Benefits of FDI in Nepalese Economy
- Increases Capital Investment
- Modern Management
- Facilitates Technology Transfer
- Generates Employment Opportunities
- Promote Export
- Promotes Economic Growth
- Supports Government Revenue
- Improves Infrastructure and Industrial Capacity
Reasons of Low FDI in Nepal
- Political Instability
- Poor Insfrastructure
- Bureaucratic Barriers
- Unfavorable Laws and Policies
- Small Market Size
- Lack of Skilled Human Resources
- Lack of Security
- Lack of Transparency
- High Level of Corruption