ABSTRACT
In some countries, such as The Republic of Korea and Indonesia, the ownership restrictions governing foreign direct investment and foreign portfolio investment differ. There are basically two options: direct ownership by domestic partners and domestic ownership via the stock market in the host country. Domestic ownership via the stock market does allow domestic participation in the profits and the increase in value of the enterprise over time. For some countries, there has been a distinction drawn in the regulations between foreign investment that creates a new business and foreign investment that simply takes over an existing business. This distinction is seen most clearly in the decisions of screening agencies. Some countries, such as China, Ghana, and Viet Nam have had minimum foreign equity ownership regulations that required the foreign investment share to be above some specified minimum percentage.
