What economic factors do you need to consider before making an investment in a foreign country?

(1) Terms of trade. (2) Interest rates. (3) Inflation rates. (4) Income levels. (5) Government policy regarding business & investment. (6) Government incentives like tax holidays, tax exemptions. (7) Access to credit- performance & role of financial institutions. (8) Economic situation- boom, depression, recovery. (9) Level of compatition in the industry. () Exchange rates.

INVESTMENT IT MEANS IT ONE KIND OF SAVING OF BALK OF CAPITAL AND IT DIVERSIFICATION OF RISK

It depends on the country that I am going to invest in.

Some countries are stable in term of the political situation, but the general economic is weak as a result of external factors such as volatility in the price of oil or precious metals.

On the other hand, it could be said that the targeted country is strong in term of economic, but it is not politically stable. I always, look at these two factors political and economical because I see them as the driver of any country either invest in or welcome their investors invest in another country.

 

 

The factors that motivate a foreign investor can be on macro, micro and meso-economic level. In general, the most important factor before undertaking an investment is the average rate of return in an economy. In addition to this, factors such as political stability, skilled and cheap labor force, security, high consumption expenditure, developed infrastructure and interest rates impact the choices of investors.

-Political risk

-Regulatory risk

-Currency risk

-Fiscal and monetary policy (soundness)

-Level of interest rates

 

-Economic and political risk.

-Currency fluctuation.

-Sources of information on country and area specific risk.

The economic policies of the foreign country as it affects Exchange rates, interest rates and inflation.

security and socio economy group

1, GOVERNMENT POLIC

2, INTEREST RATE RISK

3, TRANSFER PRICING

4. RATE OF RETURN

5. GOVERNMENT INCENTIVES

6. RISK OF EXPROPRIATION

7. RATE OF RETURN EXPECTED

Growth Rates , Exchange Rate stability, Interest Rates (Current and Historical) , national debt and rating. 

standards of treatment of foreign affiliates, compared to “nationals” of the host country , Taxation and  rules .

For an Investor to ensure a proper" FDI " he/ she  should consider the following-

1.security

2.culture

3.Taxation 

4. Nature of inflation rate

5.socio-economic and political factore

6. Trade barries- tariff and quotas, languuge, term of trade etc