In: Finance
How important is the political environment in attracting foreign investments and what are the main political factors that support the climate for business development and investments?
Political environment is very important in attraction of foreign investment because the foreign investors will always be looking for a better political governance of the country in order to invest into foreign Markets and they will be looking for optimum protection of the capital because political stability for them is a must.
Importance of political environment and main political factors which are impacting the level of foreign investment into the domestic country are as follows-
A. Political stability into the country is an important requirement for the foreign investor to invest into the domestic country for protection of their capital.
B.they will also be looking for stability into the policies of the country which are formed by the political parties of the country.
C. These investors will also be looking at the taxation policy of the political party because the investors will be looking at whether the political party is capitalist or socialist in nature.
D. They would also be looking at the rules and regulation and transparency which have been adopted by these political party in overall management of the company in the economy.
E. Their flexibility and motivation in attraction of foreign investment is also important because various political parties are really providing up with incentives to foreign investors in order to invest into the country.