Distinguish between: a. FDI and FII b. Current accou

Question

Distinguish between:

a. FDI and FII

b. Current account and capital account

09 Sep 2024

Answer :

Word Count : 771

### Distinction between FDI and FII

#### Foreign Direct Investment (FDI)

Definition and Purpose: Foreign Direct Investment (FDI) refers to investments made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the foreign country. Essentially, FDI involves a long-term interest and a significant degree of influence and control over the foreign business.

Characteristics:
1. Ownership and Control: FDI entails ownership and control. The investor usually acquires a substantial ownership stake (typically at least 10%) in the foreign company, which gives them significant influence over the business operations.
2. Long-Term Investment: FDI is typically considered a long-term investment, reflecting a commitment to the host country. The investment can be ___ _______ ____ __________ ____ ___ ______ _____ _______ ___ ______ __________.
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