How far do countries allow foreign ownership of their companies?
There is an interesting document that sets down the international rules for foreign ownership along with the exceptions: OECD National treatment for foreign controlled enterprises. The official position is that the UK allows almost any foreign ownership and most countries limit foreign media ownership. The USA has a whole raft of State based legislation that may well act to protect US businesses against foreign ownership. Germany assists German companies at the State level (most business finance in Germany being administered by the States). Japan protects land ownership and some agricultural activities and telecoms.
Another excellent source of data for the way foreign companies are managed is the World Bank publication, Investing Across Borders, 2010 Indicators of foreign direct investment regulation in 87 economies. There seems to be little difference between the developed countries, according to this report, in the way that they handle foreign investment. The report did not consider the way that local authority and State subsidies and regulations might affect foreign companies. The UK appears highly welcoming to foreign business. Despite the report noting the welcoming nature of the UK it stated that "the Industry Act (1975) enables the U.K. government to prohibit transfer to foreign owners of 30% or more of important U.K. manufacturing businesses, if such a transfer would be contrary to the interests of the country. While these provisions have never been used in practice, they are still accounted for in the Investing Across Sectors indicators, as these strictly measure ownership restrictions defined in the laws." So, even with legislation on the statute books that could be used to prevent the loss of strategic industries (such as the Sheffield steel industry) the UK still scores highly on the indicators for welcoming foreign investment. The UK could have used this legislation in recent cases where entire factories were uprooted and transferred overseas.
The answer to the question that heads this post is that most advanced economies allow fairly free foreign investment. Many countries control investment in the media.
I would propose that countries should not allow more than 75% of the market in any sector of the economy to be foreign controlled. This will provide them with a strategic base in case anything goes horribly wrong - for instance the impending bankruptcy of Greece would be ameliorated if there are domestic companies that can take over when the Greeks can no longer afford foreign produce and operating in Greece appears unprofitable to foreign companies.
The OECD and other International Organisations who lobby for total foreign ownership should be balanced to some degree by the National interest.
Source URL: https://indahrahmadewi.blogspot.com/2011/11/how-far-do-countries-allow-foreign.html
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There is an interesting document that sets down the international rules for foreign ownership along with the exceptions: OECD National treatment for foreign controlled enterprises. The official position is that the UK allows almost any foreign ownership and most countries limit foreign media ownership. The USA has a whole raft of State based legislation that may well act to protect US businesses against foreign ownership. Germany assists German companies at the State level (most business finance in Germany being administered by the States). Japan protects land ownership and some agricultural activities and telecoms.
Another excellent source of data for the way foreign companies are managed is the World Bank publication, Investing Across Borders, 2010 Indicators of foreign direct investment regulation in 87 economies. There seems to be little difference between the developed countries, according to this report, in the way that they handle foreign investment. The report did not consider the way that local authority and State subsidies and regulations might affect foreign companies. The UK appears highly welcoming to foreign business. Despite the report noting the welcoming nature of the UK it stated that "the Industry Act (1975) enables the U.K. government to prohibit transfer to foreign owners of 30% or more of important U.K. manufacturing businesses, if such a transfer would be contrary to the interests of the country. While these provisions have never been used in practice, they are still accounted for in the Investing Across Sectors indicators, as these strictly measure ownership restrictions defined in the laws." So, even with legislation on the statute books that could be used to prevent the loss of strategic industries (such as the Sheffield steel industry) the UK still scores highly on the indicators for welcoming foreign investment. The UK could have used this legislation in recent cases where entire factories were uprooted and transferred overseas.
The answer to the question that heads this post is that most advanced economies allow fairly free foreign investment. Many countries control investment in the media.
I would propose that countries should not allow more than 75% of the market in any sector of the economy to be foreign controlled. This will provide them with a strategic base in case anything goes horribly wrong - for instance the impending bankruptcy of Greece would be ameliorated if there are domestic companies that can take over when the Greeks can no longer afford foreign produce and operating in Greece appears unprofitable to foreign companies.
The OECD and other International Organisations who lobby for total foreign ownership should be balanced to some degree by the National interest.
Source URL: https://indahrahmadewi.blogspot.com/2011/11/how-far-do-countries-allow-foreign.html
Visit Indah Rahma Dewi for Daily Updated Hairstyles Collection
