A discussion of important policies and management issues in FDI decision.
Slovakia has a stable economy and politics. One of Slovakia’s point of strength is its currency which is Euro. Slovakia has a well-educated and highly skilled labor. The infrastructure increased in directly proportion. It has a huge distances of available industrial lands to buy and work. It provides the opportunities for creativity and it provides incentives as a rewards for the investments (SARIO , 2017). Slovakia is located in the center of Europe between Austria, Hungary, Czech Republic and Poland, (SARIO , 2017). The caring of the property rights security. Slovakians can adapt with different cultures. The ownership in Slovakia required some steps:
1. Contract of
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While the third fico government decreased the income tax of the corporate from 22% to 21% which will promote the investors (SGI, 2017)
• The research and innovation policy in Slovakia that motivate the R&D which promote the FDI investors.
• Creating the an agency called SARIO is promoting the investors ( Investment Climate Statement - Slovakia, 2015)
• In 2004, the tax increased from 19% to 25% and this restrict the investors ( Investment Climate Statement - Slovakia, 2015)
• During the period 1999-2003 there was a dropping in the GDP from 9% to 2% and this drop restrict the investors ( Investment Climate Statement - Slovakia, 2015)
The examples of FDI in Slovakia
Slovakia has a successful inward FDI with USA for instance Emerson, Dell, Amazon, Getrag Ford, Johnson controls and HP. Moreover, it has with Brazil Embraco, with Germany Siemens, with France Dalkia, with Australia OMV, Mercedes-Benz, with Spain Cikautxo, with Italy Brovedani, with Switzerland Holcim, with South Korea Kia motors, with Taiwan Delta electronics, Japan brother industries and China Lenovo (SARIO, 2017).
Outward FDI Penta is a Slovakia is a company and it existed in about ten markets as Bratislava, Munich Warsaw and Prague (Penta , 2017). Moreover, me opta it is existed in United States and Czech Republic (meopta , 2017)
Conclusion and Recommendation:
To recommend, Government must improve policies and regulations by
FDI appears when a commonly expanding or growing company is investing to a foreign country. FDI consists of the acquisition or creation of assets (e.g. firm equity, land, houses, oil-drilling rigs and etc.) undertaken by foreigners. Initial investment or ownership of the foreign equity has to be more than 10% but does not need to be a 100%. Anything less than 10% of the ownership will be called portfolio investment. Company which invests in foreign markets become a multinational enterprise (MNE).
whether the tax strategy is sustainable under the tax law and therefore over whether the additional
This has helped wipe out the unemployment challenge in the economy, the increased investment activities are boosting the economic growth and development which are critical factors for consideration in encouraging the negatively geared tax regime.
Though the deductions for interest and other features helped to reduce tax, corporate tax sees to it that there is no investment and the capital has become internationally mobile. Again the taxes along with corporate tax suffer a second tax as the dividends are taxed. It was shown in 2010 that the capital from the US is moving out and in future the corporate tax will cause the workers too bear the
Figure 1.7 The structure of the dissertation Figure2.2 Modes of entering foreign markets Table 2.32 Factors affecting the FDI decision Figure 2.33 Types of FDI 12 15 19 22
Eligible R&D in energy, nuclear, space, telecommunication, biomedical and IT. Resulting IP will be commercialized in Russia.
FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)
take the 16% tax and apply it to gross profits we show a nice increase in net profit and all the financial
Tax policy is a common external factor that businesses face. Paying taxes is a constant drawback that Exodus and Company faces. With Zimbabwe looking at 49 tax payments per year and impacting profit costs at 32.80%. (Doing Business). The ease of gathering all those payments is difficult with the nation’s current economic situation. Also considering that the company is in the real estate business the return of profit is usually long term. Possible tax cuts could help save potential losses for the companies
More taxes means less amount to invest, less incentive to expand business.Monetary policy (example of monetary policy instruments include interest rate, supply of money). If interest rate is high, company pays more interest and make less profit. Raising funds becomes difficult, which affect investment.
Unfortunately, Greece is trailing in attracting FDIs and the reasons will be explained in detail below. The net inflows reached EUR 2.8 billion in 2016 (enterprise Greece), the largest amount since 2008, before the beginning of the crisis. Nevertheless, Greece ranks 29th out of the 39 countries (OECD) that comprise the OECD showing that the country is unattractive to foreign investors. The same picture is illustrated and at the latest attractiveness report from Ernst & Young. Even thought Greece saw a 123% increase in FDI investment in 2016 compared to the year before is still ranked 34th in the number of FDI projects and 35th in the number of jobs created among the 44 Europeans countries that participated in the survey. Only 13 projects
November 20, 2009 Vladimir Putin announced government package of tax reforms. Corporate profit tax rate (24% in 2009) is to be reduced to 20%. Profit tax base will decrease for companies investing in capital assets as the immediately-recoverable depreciation allowance is raised from 10% to 30% of the asset cost. There will be no change in value added tax rates (maximum 18%) in 2009, but the government considered changing VAT accrual rules in favor of the taxpayers.
Levels of foreign direct investment as well as the number of international companies setting up regional hubs in Croatia also represents a positive factor for investors to bear in mind. FDI and more
The primary goal of this study is to examine the strategic goals of the Asian-Latin-American firm and it sentry into the European manufacturing sector and its goals in Research and Development and product development focused on becoming one of the top technological leaders in the industry. This firm hopes to use the technological knowledge gained from the investments in Europe to develop products and product processes in their home base and to use this to expand their exports to Europe and the U.S. This telecommunications device-manufacturing firm has an international joint venture with the leading German MNC in this industry. The German MNC is unhappy with the joint venture's performance due to what it holds as theft of intellectual property by it Asian/Latin American partner. Report on International Business Strategy. The industry in which the firm is situated must be identified and all of the primary industry-specific factors that may affect the selection of the Europe country. Institution and cultural factors affecting the selected industry and the industry-specific factors on organizational structure and control strategies must be identified.
Tax is the government sources of revenue. Government collects tax from citizen of the country and also from the business firm. Every business firms must pay tax for the betterment of the country. Business firms pay much higher taxes then the citizen of the country. But there are some sectors where’s government provide tax incentives. So investors must look after these kind of sectors and make investment over there.