Which of the following, if undertaken by a UK economic agent, would be classified as foreign direct investment?
A) A purchase of 100 shares in Vodafone.
B) A loan of £1 million to a Brazilian mining company.
C) A purchase of shares in Swiss firm Nestlé.
D) The establishment of a new accountancy practice in Bucharest, Romania.

Question

Quizplus · Accepted Answer

Only establishing a new business in a foreign country counts as foreign direct investment, as it involves a direct investment in a foreign company or subsidiary. The other options involve stock purchases or loans, which do not amount to direct ownership or control of a foreign business.

Which of the Following, If Undertaken by a UK Economic