Many companies world are expanding their businesses past their countries bounders to other countries. This move is being taken by all players in an economy from education institutions such as universities to financial services companies such as banks. Many countries in the past were very protective of local industries by discouraging foreign investment as much as possible. Governments this days have considered and agreed to allow foreign companies to expand into their countries. This can be attributed to the numerous advantages of foreign investment such as.
Citizens of the country will have wide variety of employment vacancies. Businesses usually hire people who are close to its location. Thus the country resident will get employed and earn their wages and salaries from the business.
Improvement of the infrastructure. Foreign companies are known to partner with the country’s authorities to improve on the transportation and communication channels. The foreign company also pays fees and taxes to the government which will be invested in the economic growth and development of the country.
Provision of high quality goods and services. For example in education overseas campus are known to have high quality education. Hence the people of the country get exposed to the education of different countries.
Some of the laws being passed to encourage foreign investment involves.
The law relating to ownership of land. One mechanism used to discourage foreign investment was policy that they had to acquire land 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. Foreign governments have done away with this restriction and have agreed to let the company rent out either land or building to set up its business.
Foreign governments are doing away with the many bureaucratic rules and regulations to non-resident companies. Foreign governments usually ensured that a non-resident company had to go to very many government offices before getting approval to do business in the country. Non-resident companies would abandon the prospects of investing in the country after discovering it would take them a long time to settle in. This strategy aim to entice more foreign companies into the country.
However although countries are doing all the above they have added the financial cost required to trade in the country. 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.
With time it will become necessary to revise the capital requirements of a non-resident company.
More information: their explanation