Foreign direct investment (FDI) is defined as cross-border investment in enterprises with the objective of establishing a lasting and significant influence over business activities. Where investors hold 10 % or more of the shares or voting rights, they are considered to have a sig-nificant degree of influence. A strategic long-term relationship is what differentiates FDI from portfolio investment.
The data on FDI are incorporated into three sets of statistics: The financial account – as a sub-account of the balance of payments – contains, on a monthly basis, the reported transactions at market value. The international investment position (i.i.p.) shows stocks at the end of each quarter. The FDI stock statistics report shows stocks at book value at the end of the year, based on corporate financial statements.
This distinction can only be made when looking at stocks. The aim is to record the activity of the first operating unit in the FDI relationship. This approach disregards special-purpose enti-ties and holding companies whose task is to raise capital or take over group management.
In addition, foreign direct investment can be analysed differently in terms of capital links. For more information, see the relevant pages on transactions and stocks. Data on transactions capture payments over a given period (monthly in the balance of payments and annually in the publication of FDI data). By contrast, stock data capture information at a specific point in time (end-of-quarter for the international investment position or as at the reporting date for the FDI stocks survey).
The statistics on the structure and activity of foreign affiliates (foreign affiliates statistics – FATS) provide key data on foreign-controlled enterprises.