What term describes an investor taking a controlling investment in a foreign country?

• A. Offshoring
• B. Foreign Direct Investment
• C. Reshoring
• D. Outsourcing

Answer: (B)

Taking a controlling investment in a foreign country is described by foreign direct investment. This term signals ownership and real influence over a business located abroad—often through acquiring a foreign company or establishing and running new operations that the investor controls. The emphasis here is on control across management and policy decisions, not just moving work elsewhere or contracting it out.

Offshoring refers to relocating activities to another country to cut costs or access resources, but it doesn’t require owning or controlling the foreign entity. Reshoring means bringing production or operations back to the home country. Outsourcing involves hiring another company to handle work without taking ownership or control of that foreign entity. Foreign direct investment stands out because it explicitly denotes ownership and control overseas.