Why an Investor Invest in a Country

743 Words Nov 26th, 2012 3 Pages
Why an Investor Invest in a Country?
Investors invest in a country to earn more profit by expanding their business operation. In general we can say investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future. The economic definition of investment, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.

There are some important factors regarding investor’s investment decisions in a country. These are:

1. Market Size:
Market size means the number of buyers and
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So when investors want to invest in a new country he must consider this factor very extensively.

5. Regulatory Burdens:
Regulatory burden is essentially government burden. The burden of government is the intervention and interference of government in the operations of a business. It is the cost involved in complying with regulatory requirements, collecting taxes and responding to information demands from government. So investors will search a country where regulatory burdens are much easier then others country.

6. Tax Incentives:
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.

7. Political Risk:
Political environment play an important role for investing in a country. Unstable political environment can be harmful for business. But sometimes it would be the bigger opportunities for investors. Because in the most cases investors want a risk free business environment. That’s why most of the investors will not invest in a country where political environment is not stable. This would be a big opportunity for the investor who loves to take risk.

8. Export Potential:
Investor will prefer a country

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