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Difference b/w Foreign Direct Investment & Foreign Portfolio Investment

Foreign Direct Investment (FDI) is a direct investment in a foreign business, much like creating a corporation. Foreign portfolio investment (FPI) refers to the purchase of financial assets, such as stocks, without direct control. FEMA Consultants help you understand and manage these investments.<br><br>For more info.: www.femaconsultant.com <br>Call us now: 011 47026276

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Difference b/w Foreign Direct Investment & Foreign Portfolio Investment

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  1. DIFFERENCE BETWEEN FDI VS. FPI Foreign Direct Investment vs. Foreign Portfolio Investment

  2. CONTROL & MANAGEMENT FDI gives capital extensive control over the business, including management decisions and operations. This means having a say in how the firm is managed. FPI, on the other hand, does not provide management control. Investors in FPIs only hold financial assets and do not make company choices.

  3. RISK AND RETURN PROFILE FDI involves a higher risk because of the long-term commitment and exposure to local economic conditions. However, if the business grows, it can provide great advantages. FPI is often considered to be safer because it includes trading financial assets that may be swiftly got or sold. Returns are more immediate, but may be smaller than FDI.

  4. LONG-TERM VS. SHORT-TERM INVESTMENT FDI is typically a long-term commitment in which investors invest significant capital to create or expand a business. They usually stay invested for years. FPI is frequently short-term, focused on fast purchasing and selling financial assets to maximize profits, and investors are able to change their holdings in response to market conditions.

  5. TYPE OF INVESTMENT Direct foreign investment (FDI) refers to investing directly in a firm abroad, such as purchasing an asset or establishing operations. This leads to a long-term investment in the company. FPI, on the other hand, is the purchase of financial assets such as stocks or bonds in a foreign market with the goal of earning profits but having no control over the company.

  6. THANK YOU www.femaconsultant.com skyquestc@gmail.com 011 47026276

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