Question

Jimland's government has severe restrictions toward the entry of foreign companies into the country. A foreign company interested in Jimland would have to purchase an existing company in order to conduct its business there. Hence, companies can only enter Jimland through a:

Answer 1

Answer:

A Foreign Direct Investment

Explanation:

A FDI or Foreign Direct Investment is the definition of investment an organisation or an individual makes in another country aside his own country. Mostly it is done through the acquisition of business assets, property in the foreign country or the exclusive start of a new business activity in the country.

The action of Jimland to purchase an existing company in order to conduct its business falls under the jurisdiction of FDI as the acquisition of business assets or whole businesses. It means while Jimland cannot just start its own business activity, it can purchase,continue or modify the business operations of an existing company.