What is FDI?

FDI, the abbreviation for Foreign Direct Investment, refers to an investment into a company or entity by an entity that is based in a different country. FDIs typically grant the investing company a larger degree of control and influence compared to indirect investment methods.

An FDI can be made through a variety of ways, including the creation of an associate company in the target country. An investing company can also acquire shares of the overseas company or propose a joint venture. As of 2014, a FDI relationship between two companies is defined by the OECD as the investing company owning at least 10 percent of the foreign company's shares.