Foreign direct investment is the form of the participation of the foreign capital in the realization of the investment projects on the territory of the country-recipient of the investment, which is characterized with the active participation of the investor in the activity of the company. Foreign direct investment is the most required form of investment for the developing countries, because it enables to introduce the brand new technologies and quality production into the country which would never be able to start the production of this kind itself. Naturally, FDI is extremely important for the developing countries, because when the economics and political situation are unfavourable, it is fairly impossible to start the top-quality production with the involvement of the innovations of various kinds. There are several ways of FDI and every form is characterized with the specific procedure and motivation of investing. The first type of FDI is the investment from the very beginning. The investor builds a daughter-company on the territory of another country and provides people with work but own 100% of the company.
Another form is the purchase of the shares of the company and as a result the company becomes a foreign one and the investor donates money into its development. The investor can also purchase the rights on using the land and natural resources of the country. FDI is supposed to be quite a risky process, because if one invests into the developing of a third world country, there is a possibility of crisis, incidents and bankrupting. In fact, FDI is quite an attractive process, because it brings profit much faster than the ordinary development of business.
FDI is the important and useful method for the investor and the country-recipient, because the first gets profit and the latter is provided with the high wages and employment. The issue of FDI is quite serious and requires deeper research. The student is able to research this controversial topic and improve his knowledge about the problem, its aspects, principles, mechanisms, structure, forms and purposes of the investment. One should learn about the problem a lot and focus of its positive and negative sides, because FDI is often criticized for its imperfect structure and risks. The task of the student is to evaluate the problem objectively and define its relevance in the modern world.
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