Expanding business over the borders.
Many companies world are expanding their businesses past their countries bounders to other countries. Expansion of business over borders is a goal of all institutions from banking industry to schools. In the past this move was welcomed with a lot of hostility by the destination country making set up business or institution very difficult. 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.
The country will have more jobs opportunities. Businesses usually hire people who are close to its location. Therefore creating income to the locals.
Innovation on the infrastructure. Foreign companies are known to partner with the country’s authorities to improve on the transportation and communication channels. The foreign company also pays fees and taxes to the government which will be invested in the economic growth and development of the country.
Creation of supply of new goods and services. Such as by allowing a foreign school to settle the county get exposed to new curriculum. Therefore residents are able to acquire skills which there had to travel abroad to learn locally.
Some of the laws being passed to encourage foreign investment involves.
Statutes concerning with land and real properties. One mechanism used to discourage foreign investment was policy that they had to acquire land in the country. The problem was that the land owners in the country were afraid of their land being acquired by foreigners. In addition the risk of acquiring land overseas is very high plus the company needs large amount of capital to finance the acquisition. Foreign governments have done away with this restriction and have agreed to let the company rent out either land or building to set up its business.
Reduction of the foreign company business registration requirements. Non-resident companies in the past had to submits very many documents before they could get the registration certificate. This would take a lot of time and many business would give up midway. This strategy aim to entice more foreign companies into the country.
However although countries are doing all the above they have added the financial cost required to trade in the country. The fees charged to the foreign countries maybe in terms of capital requirement or taxes have been increased at a very high margin. Non-residents are being advised that the high payment are compensation to the local government efforts of making it easy for them to expand.
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.