Investment definition and objectives

Definition of Investment

Investment means that a natural or legal person in a country other than his own uses his expertise, efforts, or money to carry out economic projects, whether alone or in partnership with a natural or legal person, local or foreign, or with the state or its citizens in establishing a project or joint projects.

Investor goals

1 - One of the first objectives that the investor seeks to achieve is to obtain raw materials from the invested countries in order to use them in their industry.

2 - Take advantage of the laws that encourage investment and the established tax exemptions granted by the host countries to investors in order to attract foreign investments to them.

3- Finding new markets for the products and merchandise of foreign companies, especially to market a large surplus of stagnant goods that these companies cannot market in their home countries.

4 - Benefiting from an important advantage in developing countries and most of the countries investing in them, as the wages of labor is usually low for industrially developed countries, as well as the cost of obtaining raw materials and transportation costs are small, and therefore also an encouraging factor for investment and a goal that investors seek to obtain.

5- One of the goals of foreign investing companies is to achieve profit in the host countries, which far exceeds their profits from their operations inside their home country.

6 - It is easy for foreign companies to compete with local companies in terms of production quality, low prices and types of service, due to their possession of advanced technology and the abundance of capital.

7 - Foreign companies benefit from their investments in the host countries from the lack of risks, as the more the investments are distributed and spread over a larger number of countries, the lower the risks of these investments will therefore be. This is a set of goals that investors seek to achieve by investing outside their home country.

Objectives that investors seek to achieve by investing outside their home country.

The host country's motives for investment:

As for the countries investing in it by accepting and encouraging foreign investments, it can be

It is summarized as follows

1 - Take advantage of the advanced technological progress and the modern art of management that characterizes it

Developed countries with the employment of rare administrative expertise in many cases and this

One of the main objectives formulated in the Libyan Investment Law No. 5 of the year

1997 on encouraging foreign capital investment.

2 - It brings foreign capital to invest in developing countries, in particular, as an attempt

To eliminate or reduce the problem of unemployment by employing a number of workers in

projects being created.

3 - With investment, the host countries are trying to increase or increase the percentage of exports

Improving the balance of payments of the investing country, especially when projects are being established

concerned with the export of its products abroad, as is the case in the Republic of Tunisia

Foreign investors are required not to sell the products of most projects

in the country.

4- Reducing imports by increasing local production to be replaced by goods

Imported locally produced goods.

5- Training local workers on advanced technical and administrative work and on

Use of advanced production methods.

6 - Finally, the countries investing in them try to enter new commercial markets and improve

Its trade movement with the outside world is the development of its trade movement.