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This Essay analyses on international market operations and the rules governing investment in the foreign sectors. Investment opportunities are vital for the free exchange and flow of economies capital. Foreign investment regulations definition has been articulated in the beginning of the essay. Additionally, the essay highlights purpose of regulations of foreign investment in the developing countries through Foreign Investment Acts. The second part of this essay involves the analyses of potential market in business activities. The management process and issues prevailing during this process of screening are vividly featured in the latter part of the essay. Finally, the steps of involved in the screening process for potential markets, sites are listed and well discussed in this report, and a conclusion that summarizes the overall concepts enacted in the essay.
Foreign investment regulations are policies set internationally by set of individual countries to govern the global investment. Foreign investment is growing rapidly in the international market has more investors seek new opportunities and markets, UN noted that between 2000-2006 was an increase in investment with United states averaging $144 billion which is 16% world total (Shelby, 2008). There is need to balance a country national security concerns with the foreign investments during process of foreign acquisitions. Under Foreign investments the foreign state, enterprises and companies are able to carry out capital investments and technology developments from various indigenous countries.
Market screening involves the process of determination of a fair market price through use of information and concepts relevant to tradable assets. In market screening of potential markets, management is required to ensure the regulation and utilization of investment ideas of stock. The management is involved in the market research in the screening process (Aaker, Kumar & Day, 2001). A major concern in the market-screening manager is the financial obligation or cost involved and the location that a particular investment/business is to be allocated. Various steps are involved in the screening of potential market.
Foreign investment constitute of exchange capital between the developing and developed countries. The flow of capital mainly flows from the most equipped countries to the less developed countries (developing countries). Two factors control foreign investment activities, which are the issue of incentives and the area of regulations. According to SIA (2003), various rules and regulations are necessary to ensure that firms are able to benefit locally in their countries and the overall.
Indeed, foreign investment regulations ensures that the production processes are made effective and in addition promotes the usage of goods and services that are competitive in the market (Shelby, 2008). Furthermore, in the case of better regulation a country is able to develop its industries and utilized the new opportunities that arise in the potential markets. These foreign involves aspects of material investment, Management and technology development, all these aspects with proper guidance and use of legal jurisdictions achieve economic growth (SIA, 2003)
The regulations for foreign investment comply with statues law, which have established foreign investment Act that guides nations as they carry out investments. The investment activities for both the Private companies (Private foreign investment) and the organizations of the government are managed under the foreign investment policies. According to SIA (2003), foreign investments regulations ensure the support of local businesses in the Republic countries in investment and furthermore attract the foreigners who are interested in entering their market. These regulations involve investment limits (company or product limit) on assets for investment. The next regulation is the use of strict policies i.e. specialized fund and mixed fund. The purpose of these foreign investment regulations is to promote foreign integration and support the current businesses under the local companies.
Market screening analyses on the potential market abilities and the current existing business environment that is likely to sustain the business. According to Lobo and Lev, management faces challenges of controlling the cost allowances and the overall geographical location that will boost the performance of a firm. In the screening process managers are supposed to ensure that, the lowest costly strategies have been implemented during the search for availability of better market/site opportunities.
These steps include the identification of market basic orientation, assessing of business environment that provides sufficient market opportunities, thereafter, the measuring of the market /site requirements and lastly the selection section of the potential market/site (Lobo & Lev, 2004). During Market screening process, the initial orientation is vital as it ensures that the basic knowledge of the potential market/site has been communicated to the management. After the initial communication, the environment can be assed to ensure the validity of management strategies to the available market. Next step is the Measurement of the Market, which ensures that that actual market allocation are determined and future preferences set aside. The Final step involves the selection of the final market for the industry/firm.
In conclusion, foreign investment regulations are vital to economies due to capital inflow and outflow and for technological advancement. In other hand, Market screening assist in establishment of potential markets and in risk assessment procedures for industries