The U.S. Commerce Department defines foreign direct investment as occurring when:
A) a U.S. company acquires at least 51% ownership of a foreign company or a foreign company acquires at least 51% ownership of a U.S. company.
B) a U.S. foreign company acquires an American company with 10 or more workers or a foreign company acquires a foreign company with 10 or more workers.
C) a U.S. company acquires at least 10% ownership of a foreign company or a foreign company acquires at least 10% ownership of a U.S. company.
D) there is only investment by foreign governments in American companies.

Question

Quizplus · Accepted Answer

The U.S. Commerce Department defines foreign direct investment as occurring when a U.S. company acquires at least 10% ownership of a foreign company or a foreign company acquires at least 10% ownership of a U.S. company. This definition allows for investment that falls below the majority ownership threshold, while still maintaining a significant level of control and influence. Option A is too restrictive as ownership of at least 51% is not necessary for foreign direct investment. Option B is also incorrect as it refers only to the acquisition of companies with 10 or more workers, which is not relevant to the definition of foreign direct investment. Option D is incorrect as it only refers to investment by foreign governments, which neglects investment by private foreign companies.

The US Commerce Department Defines Foreign Direct Investment as Occurring When