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Investment policy

An investment policy is any government regulation or law that encourages or discourages foreign investment in the local economy, e.g. currency exchange limits[?].

As globalization integrates the economies of neighboring and of trading states, they are typically forced to trade off such rules as part of a common tax, tariff and trade regime, e.g. as defined by a free trade pact. Investment policy favoring local investors over global ones is typically discouraged in such pacts, and the idea of a separate investment policy rapidly becomes a fiction or fantasy, as real decisions reflect the real need for nations to compete for investment, even from their own local investors.

A strong and central criticism of the new global rules, made by many in the anti-globalization movement, is that guarantees are often available to foreign investors that are not available to local small investors, and that capital flight[?] is encouraged by such free trade pacts.

Investment policy in many nations is tied to immigration policy, either due to a desire to prevent human capital flight by forcing investors to keep local assets in local investments, or by a desire to attract immigrants by offering passports in a safe haven[?] nation, e.g. Canada, in exchange for a substantial investment in a business that will create jobs there. A frequent criticism of such joint immigration-investment policy is that they encourage organized crime by providing incentive for money-laundering[?] and safe places for "bosses" to move to when the heat rises in their home country.

See also: tax, tariff and trade, globalization, organized crime, anti-globalization movement, immigration policy.



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