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- A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.
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How is foreign direct investment review regulated in Canada?
What is a foreign direct investment?
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What is the Canadian Foreign Investment Regulations Chapter?
Foreign direct investment review in Canada is regulated by the federal government under the Investment Canada Act (ICA). For the most part, the ICA provides that foreign investments fall under the jurisdiction of the Minister of Innovation, Science and Economic Development (Minister of Innovation, Science and Industry).
Canadian Direct Outbound Investment. Source: Pascal Tremblay, “Direct Investment Between Canada and the World” (Parliamentary Information and Research Service: August, 2014) Basic fundamental implications of the Canadian foreign affiliate rules: Active business income earned by a “foreign affiliate”
- What Is A Foreign Direct Investment (FDI)?
- How Does Foreign Direct Investment (FDI) Work?
- Special Considerations
- Types of Foreign Direct Investment
- Examples of Foreign Direct Investment
- The Bottom Line
The term foreign direct investment (FDI) refers to an ownership stake in a foreign company or project made by an investor, company, or government from another country. FDI is generally used to describe a business decision to acquire a substantial stake in a foreign business or to buy it outright to expand operations to a new region. The term is usu...
As noted above, foreign direct investment is a stake in a company or project by a foreign entity. Companies or governments considering an FDI generally consider target firmsor projects in open economies that offer a skilled workforce and above-average growth prospects for the investor. Light government regulation also tends to be prized. FDI freque...
Foreign direct investments can be made in a variety of ways, including opening a subsidiary or associate company in a foreign country, acquiring a controlling interest in an existing foreign company, or by means of a merger or joint venturewith a foreign company. The threshold for an FDI that establishes a controlling interest, per guidelines estab...
Foreign direct investments are commonly categorized as horizontal, vertical, or conglomerate. 1. With a horizontal FDI, a company establishes the same type of business operation in a foreign country as it operates in its home country. A U.S.-based cellphone provider buying a chain of phone stores in China is an example. 2. In a vertical FDI, a busi...
Foreign direct investments may involve mergers, acquisitions, or partnerships in retail, services, logistics, or manufacturing. They indicate a multinational strategy for company growth. They also can run into regulatory concerns. For instance, in 2020, U.S. company Nvidia announced its planned acquisition of ARM, a U.K.-based chip designer. In Aug...
FDI involves the direct investment by companies or governments into foreign firms or projects. This accounts for trillions in cash flows around the world, with the U.S. and China leading in the FDI inflow statistics. For smaller and developing countries, FDI funds can be a substantial part of overall GDP. Foreign portfolio investment (FPI)is relate...
Dec 18, 2020 · The Regulation of Foreign Investment in Canada: An Overview for 2021. Two members of our Competition & Foreign Investment Group recently authored the Canadian chapter of Foreign Direct Investment Regimes 2021 (2d ed.), published by International Comparative Legal Guides.
Dec 9, 2022 · This chapter, current as of September 2022, is a useful overview of Canada’s foreign investment regulations, focusing on the following topics: Foreign Investment Policy Law and Scope of Application
Mar 20, 2023 · Now in its seventh year of annual publication, White & Case's Foreign Direct Investment Reviews provides a comprehensive look into rapidly evolving foreign direct investment (FDI) laws and regulations in approximately 40 national jurisdictions and two regions.
The purpose of the Investment Canada Act (ICA)1 is to encourage foreign investment in Canada while at the same time ensuring that foreign investment contributes to economic growth and employment opportunities.
