Definition of 'Direct Investment'
1. The purchase or acquisition of a controlling interest in a foreign business by means other than the outright purchase of shares.
2. In domestic finance, the purchase or acquisition of a controlling interest or a smaller interest that would still permit active control of the company.
Investopedia explains 'Direct Investment'
The purpose of a direct investment is to gain enough control of a company to exercise control over future decisions. This can be accomplished by gaining a majority interest or a significant minority interest. Direct investments can involve management participation, joint-venture or the sharing of technology and skills.