• Political stability or uncertainty
  • Attitude of the host government towards private enterprise and, in particular, to foreign private investment
  • Special inducement for foreign investors, such as tax holidays grants, loans at favourable rates, tariff protection for newly established industries
  • Membership of a free trade area, or trade agreements with other countries that might offer export opportunities


  • Legal discrimination against foreign companies or their expatriate employees
  • Percentage of company that may be foreign-owned
  • Patent protection laws and ease of enforcement
  • Trademark protection
  • Price control legislation
  • Restriction on trade practice legislation


  • Cost increases resulting from smaller scale production, product modification to meet market needs, etc.
  • Wage costs, related to productivity
  • Availability and cost of local raw materials and components
  • Availability and cost of transport services
  • Freight, packing and insurance savings, if product previously exported to the country

Exchange Control

  • Restrictions on remittances to parent company, e.g. Maximum percentage of foreign capital invested
  • Restrictions on repatriation of capital
  • Convertibility of local currency


  • Existence of a double-taxation agreement between the host country and parent-company country
  • Withholding tax payable on remittances to parent company
  • Level of company taxation
  • Method of calculating depreciation allowances, stock valuation, etc.


  • Local sources of capital and interest rates payable
  • External sources of capital
  • Local accounting requirements and conventions
  • Rate of inflation


  • Availability of labour, e.g. skilled, unskilled and clerical
  • Availability of local managerial talent
  • Percentage of employees who must be local nationals
  • Availability of work permits for expatriates
  • Living conditions for expatriates. E.g. Housing, education, medical facilities, etc.
  • Labour laws and regulations, especially regarding the appointment and dismissal of staff
  • Industrial relations, trade unions, worker participation in management
  • Existence of compulsory profit-sharing schemes for employees

(Source: L S Walsh. International Marketing)

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