Opening business branches in other countries.
Businesses nowadays are tapping into the international market by setting up branches worldwide. Expansion of business over borders is a goal of all institutions from banking industry to schools. Many countries in the past were very protective of local industries by discouraging foreign investment as much as possible. Nowadays we have experienced in shift with countries becoming more friendly to foreign investment. This can be attributed to the numerous advantages of foreign investment such as.
Citizens of the country will have wide variety of employment vacancies. Companies when they expand will require personnel with local expertise. Thus the country resident will get employed and earn their wages and salaries from the business.
Improvement of the infrastructure. Foreign companies are known to partner with the country’s authorities to improve on the transportation and communication channels. Also the government will expand its sources of income by having the non-resident company pay fees and taxes.
Provision of high quality goods and services. Such as by allowing a foreign school to settle the county get exposed to new curriculum. Hence the people of the country get exposed to the education of different countries.
Some of the laws being passed to encourage foreign investment involves.
Legislation involving real estate. One mechanism used to discourage foreign investment was policy that they had to acquire land in the country. One limitation of this requirement was that the citizens were not willing to sell their real estate to non-residents. Also in addition land acquisition is a huge investment that many business will not want to incur especially with the risk it’s a foreign country. To encourage businesses countries have removed this law and allowed foreign companies to rent properties to use for their operations.
Reduction of the foreign company business registration requirements. Foreign governments usually ensured that a non-resident company had to go to very many government offices before getting approval to do business in the country. Non-resident companies would abandon the prospects of investing in the country after discovering it would take them a long time to settle in. This strategy aim to entice more foreign companies into the country.
Financial payments to the government is the only item that foreign countries are still reluctant to adjust fairly. The fees charged to the foreign countries maybe in terms of capital requirement or taxes have been increased at a very high margin. Foreign governments justify the high fees and taxes to creating a more conducive business environment.
Foreign government will at one point in time have to give in to the concerns raised by the high fees and taxes imposed on foreign companies.