Foreign Direct Investment
Foreign Direct Investment (FDI) refers to the act of acquiring a majority stake in a company located in a different country with the intention of assisting, growing, and managing the business. Unlike Foreign Portfolio Investment (FPI), which typically involves short-term investments with no intention of active management, FDI is characterized by lasting interest. This occurs when a company or investor acquires at least 10% control of a foreign company and intends to manage its operations actively. FDIs can be made through various methods, such as establishing a subsidiary in another country, mergers and acquisitions, or collaborations with foreign companies.
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