An Investigation and Analyses the Motivations of Engaging In Foreign Investments (2009)
Foreign Investment (FI) is an aspect of international business law that has generated a lot of interest in recent times primarily because of the immense benefits enjoyed by states and investors. Its importance cannot be over-emphasised as the years progress simply because it occupies the driving seat in the socio-political, economic and legal framework of most countries.
Furthermore, it continues to be the driving force in the in the modern day economy which advances the globalization process. The volume of investment achieved through Foreign Investment is enormous and it continues to grow. Many countries encourage inward movement or transfer of asset to their country, whether tangible or not. In addition, with the enactment of liberalisation laws in many countries today, the hitherto difficulties experienced by foreign investors are reduced to the minimal and this has led to increase participation of more investors.
Three important questions can be raised when embarking on a research work of this nature. Firstly, what personal purpose would the topic serve to the researcher? Secondly, what practical purpose would the research have? Thirdly, has the research contributed in any way to the development of the subject? As mentioned above, the importance of foreign investment cannot be overstated especially to the development of third world countries. For instance in Nigeria, one of the key economic catalysts for economic recovery and development adopted by the Nigerian government is the encouragement of foreign investments and the full participation of foreign investors in the economy growth of the country.
This has led to fundamental reviews of both investment laws and participation of aliens in its domestic enterprises. The focal point of this dissertation is to identify the different modes of entry and contractual relationships an investor may participate in foreign investments. In order to facilitate this quest, it becomes necessary to recognise the different forms of foreign investment and hence the need for a classification. It is however appropriate to mention at this stage that that foreign investment can be classified into Foreign Direct Investor and Foreign Portfolio Investment . The reason behind this classification is that there is a marked difference between a foreign portfolio investor and a foreign direct investor. This difference will be fully identified and explained in the course of this work.
The importance of this research to the field of international business law is primarily to bring to a better understanding of the various FI options, their elements and their implications to an intending foreign investor. In the course of the research, the interrelationship between different components of international law such as international commercial law, comparative company law, international financial laws are highlighted as it relates to foreign investments.
- 15,000 words – 72 pages in length
- Well written throughout
- Excellent use of literature
- Good analysis of subject area
- Useful to law, economics and business students
1: Introduction
2: Foreign Investment
Reasons for engaging in FI
Comparative currency conversion advantages
Decentralization of the operation to provide better services for international customers
Expansionist theory
Strategic positioning in the market
Spreading risk
Geographic diversification
Enhanced profitability
Rivalry
Types of investors
Classification of Foreign Investment
3: Foreign Direct Investment
Elements of FDI
Cross boundary transfer of asset
Tenure of investment
Investment Impact
Control of investment
Legal mode of entry of FDI
International Joint ventures
Branches and Subsidiaries
Legal relationships under FDI
International Franchising
International Licensing
International leasing
Special forms of FDI
Project Finance
Management contract
Turnkey Contract
4: Foreign Portfolio Investment
Meaning of Foreign Portfolio Investment
Elements of FPI
Participation of investors
Risk on investment
Investors’ presence
Investing entity
Scope of transaction
Impact of FPI
Forms of Foreign Portfolio Investment
Debt securities
Bonds
Debenture
International loan syndication
Equity securities
Preference Shares
Cumulative preference share
Non-cumulative preference
Participating preference
Convertible preference share
Common Shares
5: Conclusion
