Foreign Direct Investment · Concept

Foreign Direct Investment (FDI)

외국인직접투자 (FDI)

Foreign direct investment (FDI) is a long-term investment in which an investor from one country acquires a controlling ownership stake in a business or asset in another country, with the aim of exercising substantial managerial influence. Unlike foreign portfolio investment (FPI), which involves passive holdings of securities, FDI entails dominant influence over the invested enterprise's decision-making, typically defined as acquiring 10% or more of voting equity (OECD benchmark). FDI enterprises function as critical nodes in global supply chains and, as demonstrated by Vietnam's role after the US-China tariff war, are analyzed as primary channels of trade rerouting.

Sources

  1. Wikipedia (EN) general definition, platform FDI concept, distinction from FPI; OECD 10% voting-equity threshold
  2. investopedia.com practical definition, types (horizontal/vertical/conglomerate), FDI as long-term control vs. portfolio investment
  3. voxchina.org FDI in Vietnam trade rerouting context: Chinese-owned firms in Vietnam driving firm-level rerouting behavior during US-China trade war
  4. customs.gov.vn Vietnam Customs 2025: FDI enterprises account for 77% of Vietnam's total exports ($3,657.2 billion), driving the trade surplus
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