Most countries attract foreign direct investments to create jobs, increase economic growth and expand technical knowledge among locals. Setting up a business in another country is not one of the easiest things to do. Some countries have restrictions and long processes before you can finally settle down and run your business. Now that you already know what foreign direct investments are? and looking forward to making one, you should know what different countries do to attract FDI.
Governments seek to encourage people to invest in their country in a bid to expand domestic economic growth. This not only attracts new job opportunities but also technology and business skills in their country. However, even when trying to attract FDI, governments will still control the type of business, quantity and sometimes the nationality of the investors.
The host country can offer tax incentives along with loans to help foreign investors get established. ‘What’s more, it may also include insurance and tax breaks to allow the new investors to promote their overseas investments. How China got established in Africa is a perfect example of financial incentives.
The host government enhances local infrastructure including communication, transportation and energy to attract specific industries. It creates a good business environment that not only benefits the foreign investors but improves conditions for local companies too.
Friendly Regulatory Environment
Most countries that are interested in foreign direct investments will streamline regulatory processes. This attracts investors who are looking for easy to venture markets. Reduction of bureaucracy and statutory laws makes a country attractive to foreign investors.
The quality of the workforce in a country can also attract or put off investors. Business journalism is one of the most sought-after professions by media houses looking for the workforce. Without signs of proper education, most business will not consider venturing into some markets.
Political and Economic Stability
The host country ensures political, legal and economic stability to reassure investors that the conditions are excellent for investment. This also includes transparency and clearly states that the environment will not change shortly.
Impact of Foreign Direct Investment
While countries will offer incentives to attract foreign direct investments because it’s beneficial to them, the investors also benefit. A company’s growth will increase especially if they are strategic and invest in a country that has its target audience. It takes patience for a new business to flourish in a foreign market. Apple ventured in the Chinese market, but more than a year to make profits.
When looking for the best country to move your business to, always consider the following first
- Accessibility of raw materials and the infrastructure of the country in general.
- Cost of labour and wage rate
If you can find these three in your country, it might be a good idea to invest here. But, do ignore other factors such as tax and political stability. Some are too harsh that you might never enjoy any profits in the country. Though for online Platforms like The Online Publishers TOP Platform, you can work globally from any part of the world.