ABSTRACT
Taxation, minimum capital requirements, debt/equity restrictions, and access to foreign exchange also have differed between national firms and foreign-owned ones. Beyond the formal foreign direct investment restrictions that apply to foreign investors, the regulatory system itself may affect the foreign investment decision. Just as a foreign investor may wish to have a domestic joint venture partner to provide expertise in marketing or personnel management, the foreign investor may wish to have a domestic joint venture partner to manage the regulatory process. This situation may exist even when 100 per cent foreign ownership is permitted. In some countries, firms in which foreign investors have greater than some specified ownership percentage were not granted 'national status'; rather they were classified as foreign-owned firms. Without national status, foreign-owned firms have been prohibited from borrowing in the domestic market or accessing low interest rate loans.
