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What is direct foreign investment (DFI)?

Direct foreign investment (DFI) is when a company or individual in one country invests money or assets into a business located in a different country. The company or individual would make the investment based on their desire to do business in that country.

DFI is different from a portfolio investment as the company or individual wants to be able to control the foreign company and basically treat it as a subsidiary.

Below is an example of direct foreign investment. Basically, the Finland based company acquires a hospital chain in Zimbabwe and continues to operate it as usual.

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