The role of investment promotion in FDI atractiveness

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The role of investment promotion in FDI
atractiveness

• Ing. Tomá Dudá, PhD.

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In an ideal world it would be enough to create an
attractive investment environment, but
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Introduction

• Investment promotion the sum of all government
  activities with the goal to try to attract
  foreign direct investments

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The basic types of investment promotion activities

• Main objective
• to improve a countrys image within the
  investment community as a favorable location
  (image-building activities)
• to generate FDI directly (investment-generating
  activities)
• to provide services to prospective and current
  investors (investment service activities)

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Tools of image building

• advertising in the general financial media
• participating in investment exhibitions
• Advertising in industry or sector specific media
• conducting general investment missions in other
  countries
• conducting seminars on general investment
  opportunities

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Tools of direct FDI generation

• Direct mail or telemarketing campaign
• Industry or sector specific investment missions
  abroad
• Industry or sector specific investment seminars
• Engaging in firm-specific research followed by
  sales presentations

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Services to prospective and current investors

• Pre-investment counseling and services
• business matchmaking, domestic market
  information, advice on employment conditions,
  finding suitable sites, advice on financial
  services, feasibility studies, environmental
  impact studies
• Post-investment services
• assistance with registration, legal assistance,
  assistance with work permits, customs assistance,
  help with selecting local personnel

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Investment promotion agencies (IPA)

• Relatively new institutions, but their number was
  growing fast in the recent two decades
• Ex. SARIO, Czechinvest, PAIZIZ, Invest in
  Germany
• Today we can find around 160 national IPAs and
  approx. 250 regional IPAs
• Usually they are public institutions

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Rozpocet agentúr na podporu prílevu PZI
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Financial incentives

• Fiscal
• the goal is to decrease the level of taxation of
  the investor
• Financial
• to goal is to give direct financial aid to the
  investor
• Other incentives
• usually indirect ways to help the foreign
  investor

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Examples of incentives

• Tax discount or tax holiday
• Subsidies for new workplaces
• Subsidies for training of the new employees
• Subsidized loans to finance the investment
• Subsidized land/free land transfer
• Building of the necessary infrastructure
• Special economic zones
• Industrial parks

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