Many companies world are expanding their businesses past their countries bounders to other countries. Foreign investment is a move considered by all companies irrespective of the industry for example universities are moving to other countries as well as banks. Some time back countries were very harsh to foreign companies trying to set up branches. However currently many countries are passing laws and decrees to encourage more and more companies to settle in their country. This can be attributed to the numerous advantages of foreign investment such as.
The country will have more jobs opportunities. Companies when they expand will require personnel with local expertise. Thus the country resident will get employed and earn their wages and salaries from the business.
Improvement of the infrastructure. It is evident that foreign company will understand public private partnership with the government and assist in the construction of roads and railways. Also the government will expand its sources of income by having the non-resident company pay fees and taxes.
Creation of supply of new goods and services. This is especially the case with education where foreign institutions helps to diversify the education sector of the country. The citizens will get to learn new courses which were not initially offered by local institutions.
Some of the laws being passed to encourage foreign investment involves.
Legislation involving real estate. Some countries had very strict conditions that a business had to own a piece of land in order to operate in the Country. This was a major challenges as the locals may be reluctant to sell or lease their land to foreign companies. Also in addition land acquisition is a huge investment that many business will not want to incur especially with the risk it’s a foreign country. This laws was replaced by allowing businesses to have short term occupancy agreement of real estate with the residents.
Elimination of the unnecessary long approval procedures. The foreign companies usually had to provide and get a lot of approvals before they would set up the operations in the Country. This would take a lot of time and many business would give up midway. To encourage businesses the countries have reduced the requirements and approvals need.
Financial payments to the government is the only item that foreign countries are still reluctant to adjust fairly. Foreign governments have raised the minimum capital requirement for the non-resident companies. The governments of the foreign countries will argue that to make the services delivery better they have to charge more.
Foreign government will at one point in time have to give in to the concerns raised by the high fees and taxes imposed on foreign companies.