The category of international investment made by a resident entity in one economy (direct investor) with the objective of establishing/obtaining a lasting interest in an enterprise resident in an economy other than that of the investor (direct investment enterprise). ”Lasting interest” implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence by the direct investor on the management of the direct investment enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent transactions between them and among affiliated enterprises, both incorporated and unincorporated.
Reference: 5th edition of Balance of Payment Manual (BPM5) (International Monetary Fund); Detailed Benchmark Definition of the Foreign Direct Investment (Organization for Economic Cooperation and Development); and Glossary of Foreign Direct Investment Terms (Survey of Implementation of Methodological Standards for Direct Investment (SIMSDI)) 1993 System of National Accounts
Board Resolution: NSCB Resolution No. 12 - Series of 2004