Starting a Foreign Investment across Sectors

The ease of starting a foreign investment in various sectors is a relevant consideration for investors seeking to establish an investment project abroad. Two thematic areas will be analyzed in this paper to answer the following questions: Which economies impose equity ownership restrictions on foreign investors and which procedural barriers do foreign companies face when establishing foreign-owned subsidiaries in these economies? The analysis is based on findings from the Foreign Direct Investment Regulations indicators, which measure 103 economies, on whether they restrict foreign ownership across economic sectors and on the establishment process they impose on foreign-owned companies. Nearly 80 percent of the economies covered in the Foreign Direct Investment Regulations database restrict foreign companies from entering in some sectors of their economies. In addition, establishing a foreign-owned company takes longer and requires more steps than starting a domestically-owned company in 94 percent of the economies observed. Overall, economies in Eastern Europe and Central Asia and high-income OECD economies have fewer equity restrictions on foreign ownership than economies in the other regions and require the least number of additional procedures of foreign companies to establish a subsidiary. The findings are significantly correlated with inflows of foreign direct investment on a per-capita basis.

Bibliographic Details

Main Authors:	De la Medina Soto, Christian, Ghossein, Tania
Language:	English en_US
Published:	World Bank, Washington, DC 2013-11
Subjects:	ACCOUNTING, ACIDS, AFFILIATED ORGANIZATIONS, AIR, AIR PASSENGER, AIR TRANSPORT, ALCOHOLIC BEVERAGES, ANNUITIES, AUTOMOBILE, BANK BRANCHES, BANK POLICY, BANKING SERVICES, BILATERAL INVESTMENT, BILATERAL INVESTMENT TREATIES, BUSINESS ENVIRONMENTS, BUSINESS REGULATION, BUSINESS REGULATIONS, CAPITAL INFLOWS, CAPITAL INVESTMENT, CAPITAL REQUIREMENT, CENTRAL BANK, CHIT FUNDS, CLOSED ECONOMY, COMMERCIAL LAWS, COMMERCIAL REGISTRY, COMMON LAW, CREDITOR, CROSS-COUNTRY DATA, CURRENCY, DEPOSIT, DEVELOPING COUNTRIES, DOMESTIC ENTERPRISE, DOMESTIC INVESTORS, DRIVERS, DRIVING, ECONOMIC BENEFITS, ECONOMIC GROWTH, ECONOMIC REFORMS, ELECTRONIC REGISTRATION, ENTRY BARRIERS, EPZ, EQUIPMENT, EQUITY INVESTMENT, EXPENDITURE, EXPORT PROCESSING ZONE, FDI, FINANCIAL INCENTIVES, FINANCIAL SERVICES, FINANCIAL SYSTEM, FOREIGN ACQUISITIONS, FOREIGN BANK, FOREIGN CAPITAL, FOREIGN COMPANIES, FOREIGN COMPANY, FOREIGN COMPETITORS, FOREIGN DIRECT INVESTMENT, FOREIGN EQUITY, FOREIGN FIRM, FOREIGN FIRMS, FOREIGN INVESTMENT, FOREIGN INVESTMENTS, FOREIGN INVESTOR, FOREIGN INVESTORS, FOREIGN OWNER, FOREIGN OWNERSHIP, FOREIGN OWNERSHIP RESTRICTIONS, FOREIGN PARTICIPATION, FOREIGN PARTNER, FOREIGN-OWNED COMPANIES, FOREIGN-OWNED COMPANY, FOREIGN-OWNED FIRM, FREE TRADE, FREE TRADE AGREEMENTS, FREIGHT, FREIGHT RAIL, FREIGHT TRANSPORT, FUEL, GLOBAL ECONOMICS, HOME COUNTRY, HOST COUNTRY, HOST ECONOMY, HUMAN CAPITAL, INCOME, INCOME TAX, INLAND WATERS, INLAND WATERWAYS, INSURANCE POLICIES, INTERNATIONAL BANK, INTERNATIONAL ECONOMICS, INTERNATIONAL INVESTMENT, INTERNATIONAL INVESTMENT AGREEMENTS, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, INVESTING, INVESTMENT ACT, INVESTMENT AMOUNT, INVESTMENT BANKING, INVESTMENT CAPITAL, INVESTMENT CLIMATE, INVESTMENT CLIMATES, INVESTMENT DECISIONS, INVESTMENT FLOWS, INVESTMENT INCENTIVES, INVESTMENT POLICIES, INVESTMENT PROCESS, INVESTMENT PROJECTS, INVESTMENT PROMOTION, INVESTMENT PROMOTION AGENCY, INVESTMENT REGULATIONS, INWARD FOREIGN DIRECT INVESTMENT, ISSUANCE, JOINT VENTURE, JOINT VENTURES, JURISDICTION, LARGE-SCALE INVESTMENT, LEGAL INSTRUMENTS, LEGAL RECOURSE, LEGAL SYSTEM, LIBERALIZATION, LIFE INSURANCE, LIFE INSURANCE POLICIES, LIMITED LIABILITY, LIMITED LIABILITY COMPANIES, LIMITED LIABILITY COMPANY, LLC, LOCAL BANK, LONG-DISTANCE, MANUFACTURING FIRMS, MANUFACTURING SECTOR, MANUFACTURING SECTORS, MARKET SIZE, MINIMUM CAPITAL REQUIREMENT, MINIMUM CAPITAL REQUIREMENTS, MINORITY SHAREHOLDER, MISMANAGEMENT, MODES OF TRANSPORT, MONOPOLIES, MONOPOLY, NATIONAL SECURITY, NATURAL RESOURCE, NATURAL RESOURCES, OPEN ECONOMIES, OPEN ECONOMY, OUTPUT, OWNERSHIP RIGHTS, PARENT COMPANY, PARTICULAR COUNTRY, PASSENGER TRANSPORT, PHYSICAL SECURITY, POLITICAL RISK, POLITICAL STABILITY, POST OFFICES, PRIVATE SECTOR, PRIVATE SECTOR DEVELOPMENT, PRIVATIZATION, PUBLIC COMPANIES, PUBLIC INVESTMENT, PUBLIC POLICY, PUBLIC POLICY OBJECTIVES, PUBLIC TRANSPORT, PUBLIC UTILITIES, RAIL TRANSPORT, RAIL TRANSPORTATION, RAILROAD, RAILWAY, RAILWAYS, REGISTRATION PROCESS, REGULATORY BARRIERS, REGULATORY ENVIRONMENT, REGULATORY FRAMEWORK, REGULATORY FRAMEWORKS, REGULATORY REFORM, REINSURANCE, REMITTANCES, RENEWABLE ENERGY, RESERVE, RESERVE BANK, RETAIL BANKING, RETAIL TRADING, ROAD, ROADS, ROLLING STOCK, ROUTE, ROUTES, SAFETY, SANITATION, SAVINGS, SECURITY CONCERNS, SHAREHOLDER, SHAREHOLDERS, STARTUP, TAX, TELECOMMUNICATIONS, TELECOMMUNICATIONS INFRASTRUCTURE, TRADE LIBERALIZATION, TRADING, TRANSITION ECONOMIES, TRANSPARENCY, TRANSPORT, TRANSPORT SECTOR, TRANSPORT SERVICES, TRANSPORTATION, TRANSPORTATION SERVICES, TRUCKS, TRUE, VOTING SHARES, WORLD DEVELOPMENT INDICATORS, WORLD INVESTMENT REPORT, WORLD INVESTMENT REPORTS,
Online Access:	http://documents.worldbank.org/curated/en/2013/11/18523536/starting-foreign-investment-across-sectors https://hdl.handle.net/10986/16906
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