What is Foreign Direct Investment?

A definition of Foreign Direct Investment

“Foreign Direct Investment (FDI) involves a company or individual investing in business interests located in another country, typically with a long-term outlook.”

Foreign Direct Investment in Business Glossary - What is a Foreign Direct Investment?

Business Glossary > What is Foreign Direct Investment?


Examples of Foreign Direct Investment in a Sentence:

Many countries compete to attract foreign direct investments.

Foreign direct investment can stimulate economic growth.

Our firm is planning to increase its foreign direct investments in Asia.

Why is Foreign Direct Investment Important in Business?

Understanding foreign direct investment is essential for recognizing its impact on global trade and economic growth. FDI can lead to job creation, technology transfer, and increased capital flows into a host country.

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Associated Terms

Here are some associated business terms and synonyms for “Foreign Direct Investment”:

  • International Investment
  • Cross-Border Investment
  • Global Investment

Toyota’s Foreign Direct Investment

Toyota has made significant foreign direct investments in the U.S. automobile industry. By establishing manufacturing plants in states like Kentucky, Toyota has contributed to local employment and economic development while expanding its market presence.

Final Notes on Foreign Direct Investment

Entrepreneurs and businesses looking to engage in foreign direct investment should consider the following:

  • Regulatory and political environment
  • Potential return on investment
  • Risks associated with exchange rates

Understanding these factors aids in making strategic investment decisions abroad.


This has been a definition of Foreign Direct Investment meaning.

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