Direct Investment

AAA

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.

RELATED TERMS
  1. Control Stock

    1. Equity shares owned by major shareholders of a publicly traded ...
  2. Controlling Interest

    When one shareholder or a group acting in kind holds a high enough ...
  3. Minority Interest

    1. A significant but non-controlling ownership of less than 5 ...
  4. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  5. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding ...
  6. Path To Profitability (P2P)

    A clearly defined route to profitability as described in a business ...
RELATED FAQS
  1. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Full Answer >>
  2. How are corporate poison pills regulated in the United States?

    The Delaware Supreme Court was the first legal authority to declare poison pills a valid initiative. This defense is either ... Read Full Answer >>
  3. How can a company resist a hostile takeover?

    Several different defense strategies can be applied by existing corporate boards to ward off a hostile takeover. The most ... Read Full Answer >>
  4. How does debt-to-capital change when a company issues new shares of stock?

    The debt to capital of a company changes when it issues new shares of stock by decreasing its amount of total debt in relation ... Read Full Answer >>
  5. How does a letter of intent work in the context of mergers and acquisitions?

    A letter of intent, or LOI, is used to set forth the terms of a proposed merger or acquisition. It is usually the first step ... Read Full Answer >>
  6. What happens to the shares of a company that has been the object of a hostile takeover?

    The shares of a company that is the object of a hostile takeover rise. When a group of investors believe management is not ... Read Full Answer >>
Related Articles
  1. Investing

    Investing In Brazil 101

    Brazil is well positioned for future growth, and luckily for investors, it also has a very liberal investing climate.
  2. Entrepreneurship

    Top 6 Factors That Drive Investment In China

    FDI in China surpassed $100 billion in 2010, certain key factors drive foreign direct investment.
  3. Economics

    What is a Management Buyout?

    A management buyout, or MBO, is a transaction where a company's management team purchases the assets and operations of the business they manage.
  4. Fundamental Analysis

    Explaining Enterprise Multiple

    The enterprise multiple is a ratio used to value a company as if it was going to be acquired.
  5. Chart Advisor

    3 Basic Material Stocks Poised For A Pop

    After large market swings such as the one seen on March 30, 2015, it is not surprising to see traders become more tolerant towards taking on risk.
  6. Investing

    Wizards Of Odd: A Trip To Tech Land

    I spent a couple of days in Silicon Valley, and here are some key lessons I learned after meeting with a number of tech CEOs and venture capitalist.
  7. Investing

    What Tech Companies Seeking Funding Must Overcome

    Tech companies face a unique set of challenges, including a need for timely responses to changes in technology and difficulty recruiting the right talent.
  8. Stock Analysis

    Will Kraft-Heinz Be a Winner?

    Kraft and Heinz are now one. This should present a profitable long-term investment opportunity, but isn't likely to be smooth sailing at first.
  9. Investing

    WhatsApp: The Best Facebook Purchase Ever?

    WhatsApp is Facebook's largest acquisition to date. What makes it worth the major price tag?
  10. Entrepreneurship

    Emerging Startup Cities Of 2015

    While Silicon Valley and New York have been the birthplace of several well-known startups, other U.S. cities are making names for themselves as tech hubs.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center