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Foreign Direct Investments Outline

Law Outlines > International Business Transactions Outlines

This is an extract of our Foreign Direct Investments document, which we sell as part of our International Business Transactions Outlines collection written by the top tier of Thomas Jefferson School Of Law students.

The following is a more accessble plain text extract of the PDF sample above, taken from our International Business Transactions Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:

#4 - FOREIGN DIRECT INVESTMENTS FOREIGN DIRECT INVESTMENT (WHOLLY OWNED ENTITY)

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Foreigner may own 100 % of the venture in a host country o Developing countries have attempted to encourage more foreign investments in their country by increasing the ownership percentage of the foreign partner

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Implementation of a US company in a foreign country Good idea b/c: o US company can cut costs by employing foreign laborers at low salaries o Can use cheaper foreign products to produce the same product However: o Necessary to have some foreign employees/managers in order to cut through the red tape of a foreign country o Impt. to understand the language and culture of the country Challenging but potentially lucrative type of business investment Difficult to manage w/out the extensive use of local consultants Purchasing/leasing office space is difficult Problems with conditions of the country - i.e.: o Corruption of city officials o Crime on the streets o Bribery Not a good idea w/communist nations o Countries don't look highly upon this - see foreigners as "taking over" (MacDonaldization)

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JOINT VENTURE AGREEMENTS

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**Rule**
o A joint venture is an association of two or more parties for the purpose of conducting business and making a profit for a specific project and for a designated period of time
? 2 things that differ it from a partnership:

* Specific project

* Designated period of time

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Marriage of two companies o Host - controlling interest of 51% +
o Foreign company - minority interest of 49% ? * can now be 50/50

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