What is Foreign Investment ?
The capital flow from one country to another country that gives Huge Returns or Managerial Ownership Rights on Asset of Investment Destination in an Foreign Investment. Foreign Investment plays very vital role in the growth of a country and it all depends on the ease of doing business norms and simple investment policies.
Foreign Portfolio Investment- What is FPI?
Foreign Portfolio Investment allows Investors to have Indirect Securities and ownership over Company Asset. This model gives Indirect Authority to foreign investors over Bonds, Shares and Financial Statements of an Foreign Company.
FDI vs FPI - Differences & Example
Foreign Direct Investment (FDI) |
Foreign Portfolio Investment (FPI) |
FDI shows the direct business interest in a foreign country. |
FPI is for Indirect business interest in a foreign country. |
FDI is more risky investment compare to FPI. |
FPI is less risky investment companre to FDI. |
FDI's goal is to create a long term income stream. |
FPI's goal is to create quick return of money. |
Investors have control over securities of business in FDI. |
Investors does not have control over securities of the business in FPI. |
For example: An Indian Investor purchases a storage house in America so a German company can expand its operations. |
For example: United States received 84% of total remittances as FPI in June, 2016. |