Green Field Investment

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What is a 'Green Field Investment'

A green field investment is a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees.

This is opposite to a brown field investment.

BREAKING DOWN 'Green Field Investment'

Green field investments occur when multinational corporations enter into developing countries to build new factories and/or stores.

Developing countries often offer prospective companies tax-breaks, subsidies and other types of incentives to set up green field investments. Governments often see that losing corporate tax revenue is a small price to pay if jobs are created and knowledge and technology is gained to boost the country's human capital.

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RELATED FAQS
  1. How do businesses decide whether to do FDI via green field investments or acquisitions?

    When businesses decide to expand their operations to another country, one of the more important dilemmas they can face is ... Read Answer >>
  2. What is the difference between a green field and a brown field investment?

    Read about the advantages and disadvantages of pursuing green field or brown field investments in the foreign direct investment, ... Read Answer >>
  3. What does it mean when a country has little activity in its capital account?

    Know what a country's capital account represents and understand what the implications are if a country has little activity ... Read Answer >>
  4. What nations are actively recruiting FDI (foreign direct investments)?

    Understand the concept of foreign direct investments, and learn which countries most enthusiastically pursue investments ... Read Answer >>
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