Foreign direct investment (FDI) or foreign investment refers to the net inflows of investment to

acquire a lasting management interest (10 percent or more of voting stock) in an enterprise
operating in an economy other than that of the investor.[1] It is the sum of equity capital,
reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance
of payments. It usually involves participation in management, joint-venture, transfer of
technology and expertise. There are two types of FDI: inward foreign direct investment and
outward foreign direct investment, resulting in anet FDI inflow (positive or negative) and "stock of
foreign direct investment", which is the cumulative number for a given period. Direct investment
excludes investment through purchase of shares.[2]
FDI is a measure of foreign ownership of productive assets, such as factories, mines and land.
Increasing foreign investment can be used as one measure of growing economic globalization.
The figure below shows net inflows of foreign direct investment in the United States. The largest
flows of foreign investment occur between the industrialized countries (North America, Western
Europe and Japan). But flows to non-industrialized countries are increasing sharply.
Types
A foreign direct investor may be classified in any sector of the economy and could be any one of
the following:[citation needed]

 an individual;
 a group of related individuals;
 an incorporated or unincorporated entity;
 a public company or private company;
 a group of related enterprises;
 a government body;
 an estate (law), trust or other social institution; or
 any combination of the above.

Methods
The foreign direct investor may acquire voting power of an enterprise in an economy through any
of the following methods:

 by incorporating a wholly owned subsidiary or company

 by acquiring shares in an associated enterprise
 through a merger or an acquisition of an unrelated enterprise
 participating in an equity joint venture with another investor or enterprise