investment law topic 1 Flashcards
what are the 2 types of investment
direct and portfolio investment
what is foreign direct investment
it is the type of investment where the a person or a company in one country sees a business opportunity or a business they can invest in this can be by starting a business there or by buying shares in an already existing business for the sole purpose of running the business or just taking part in major decision making
what is portfolio investment
it is the an investment made by a person or company into a business simply to make profits or increase assets and never really take part in the daily running of business
what is the major difference between foreign direct investment and portfolio investment
in foreign direct the investor wants to make decisions and run the business and in portfolio they just need to make a profit and increase assets
why does zambia need investments both foreign and portfolio
it is a developing nation and it doesn’t have enough money to run the nation so investors are encouraged to invest in the nation.
what are the 4 major indicators of an investment friendly country?
double taxation agreements
physical infrastructure
human resource development
political stability
what are some examples of portfolio investment
mpile trust and
funds in national pensions scheme NAPSA
why do we need the four major indicators of an investment friendly climate? 3marks.
for the government to market their nation
for the investors to gauge whether or not to invest in the business or not
and for the community to measure whether the investment is being used for its intended purpose
why is political stability an indicator of good investment climate for investors?
political stability is a vital factor for investors as it assures them that there is peace in a country and that the policies are stable and they are safe from expropriation. there investments and safe and they will most definitely benefit from the investment because the government wont make any changes to their agreement.
what is expropriation
this is when property rights are taken away from someone without compensation.
what is an investors biggest fear?
expropriation
does the government put any measures to attract investors in Zambia and reassure them the expropriation wont happen?
the constitution protects them from expropriation that’s article 16 of the constitution which says protection from deprivation of property. Zambia also offers low taxes for investing countries.
