Definition: Direct foreign investment

ESA 1995

Investment involving a long-term relationship reflecting a lasting interest of a resident institutional unit in one economy ("direct investor") in an institutional unit resident in an economy other than that of the investor ("direct investment enterprise"). The direct investor's purpose is to exert a significant degree of influence on the management of the enterprise resident in the other economy. Direct investment involves both the initial transaction between the direct investor and the direct investment enterprise and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated (§ 5.132).

Direct foreign investment involves a long-term relationship reflecting a lasting interest of a resident institutional unit in one economy (‘direct investor’) in an institutional unit resident in an economy other than that of the investor (‘direct investment enterprise’). The direct investor’s purpose is to exert a significant degree of influence on the management of the enterprise resident in the other economy (Annex 7.1: Definition of each asset category).
Source:
Eurostat, "European System of Accounts - ESA 1995", Office for Official Publications of the European Communities, Luxembourg, 1996
Created:
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