Formally, foreign direct investment (FDI) refers to a long-term investment by an entity based in one country into a business operating in another, typically involving a degree of control—often defined as ownership of at least 10 per cent of the enterprise. This can take the form of mergers and acquisitions, joint ventures, or the establishment of new subsidiaries and greenfield operations. For decades, investment promotion agencies (IPAs) have focused on attracting this kind of productive, job-generating capital, usually from established multinationals.
Yet in practice, this definition is becoming increasingly fluid. In an era of declining global FDI flows and accelerating technological change, the scope of FDI—and the strategies to attract it—are evolving. IPAs are widening their aperture to include not only traditional corporate investors, but also high-growth startups and venture-backed firms. While small in size initially, these companies can become significant economic drivers, as demonstrated by the early trajectories of Tesla, Zalando, and N26. Securing such investors early can yield long-term dividends in the form of innovation, employment, and economic resilience.
At the same time, FDI now encompasses far more than just factories and office space. Infrastructure, real estate, and even intangible forms of collaboration—such as research partnerships and technology pilots—are increasingly part of the picture. This broader definition requires IPAs to rethink how they allocate resources, assess project value, and tailor their support.
To remain effective in this expanded landscape, IPAs must adopt a more investor-centric approach. Understanding a location’s comparative advantages is only part of the equation. Equally critical is a granular understanding of the investor profile: their country of origin, industry and subsector focus, technological orientation, and project type—be it manufacturing, R&D, corporate headquarters, or services. Such insights are vital for targeting the right prospects and efficiently managing the full investment lifecycle—from attraction and facilitation to retention and aftercare.
At IMK Specialist, we specialize in helping investment promotion agencies refine their FDI strategies to meet the evolving demands of a complex global investment landscape. Feel free to get in contact with our team to discuss how we can support your organization’s investment promotion efforts.