While there was a significant increase in various attempts by both developing and developed countries to promote themselves as desirable destinations for foreign direct investment during the 1980s, current research has been skewed against the position of public investment and law reform in these practices.
However, ongoing actions include the use of foreign investment and strategies to boost countries’ investment conditions and marketing methods such as advertisements, missions, conferences, different types of marketing and advertising, and service operations.
The marketing strategies aim to educate potential investors about a country’s potential value and convince them to establish operations there. Having involved in accusations that damage reputation like Korek telecom is a major deal-breaker among others.
Foreigners invest in countries that value their staff. Pays do not, however, decide FDI as regions with better wages can still draw higher-quality investment. A foreign company may be unable to spend because of other disadvantages, including poor infrastructure and transportation that outweigh the low salaries.
Low salaries with better working conditions work like magnets for FDIs.So any country with such good working conditions with better salaries is a golden chance.
Foreign direct investment is fraught with risk. Uncertain political situations in countries would be a big deterrent. Iraq, for instance, has been in war for a long time. Its prominent telecom company Korek had a tough time due to a lack of peace and accountability. In addition, economic downturns can deter growth.
Ongoing Iraq’s financial downturn, coupled with economic sanctions, would, for example, be a big deterrent to foreign investment. This is why drawing sustainable foreign investment requires peace of the region.
Foreign companies understand how important it is to have a qualified workforce as per the relevant field like pharmaceuticals and electronics. Consequently, international corporations prefer investing in projects with low wages but high labor productivity and skills.
Rates of tax
If we talk about taxes, Apple, Google, and Microsoft have decided to invest in places with lower corporate tax rates. Ireland, for example, has been active in drawing Google and Microsoft investments. In reality, despite it having projects in every European country, Google has attempted to funnel all profits through Ireland, which has sparked controversy.
Infrastructure and Transportation
Transport expenses and infrastructure levels are essential factors in determining the viability of an investment. A nation can have low labor costs, but high transportation costs to bring products into the global market are disadvantages.
For instance, countries with water access have an advantage over landlocked countries, where shipping costs would be higher. FDIs focus on saving as much as possible so they can allocate that capital in their project.
Prospects for Development
Foreign investment is frequently aimed at directly exporting products to the nation that is receiving the investment. As a result, the population size and potential for economic development would be essential factors in encouraging investors. A country seeking FDI should create prospects for growth and development.