When a corporation purchases or builds a facility in a foreign country, it is called foreign direct investment.
What is the foreign direct investment?
- Foreign direct investment is a financial commitment made by a company with its headquarters in another nation to acquire a majority stake in a company operating in another country.
- Thus, the idea of direct control sets it apart from foreign portfolio investment.
- A foreign direct investment (FDI) occurs when a business or investor from outside the country buys a stake in the firm.
- The phrase often refers to a commercial decision to buy a sizable portion of a foreign company or to buy it all together in order to expand its operations to a new area.
- Foreign direct investment occurs when a company buys or constructs a facility in another nation.
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