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Foreign direct investment (FDI)

In a nutshell

FDI is cross-border investment that gives an investor control or significant influence over a business.

On this page

Explained simply

It may involve setting up operations or acquiring a lasting ownership stake. It differs from a simple portfolio investment.

A practical example

Hypothetical example: a Moroccan company establishes and controls a processing plant in Senegal; this operation is FDI.

Further reading

Source: World Bank — Foreign direct investment.

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What this means

A company establishing and controlling a factory abroad makes a foreign direct investment.

Educational scenarios. Amounts and rates are fictional, not current market conditions.

What characterises FDI?

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