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Ownership in Foreign Direct Investment - Essay Example

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Ownership in Foreign Direct Investment

Some of these reasons are clearly envisioned in the case study on Genting International and includes the fact that transnational ownership give owners of companies the right and opportunity of benefiting from labor and investment laws that apply to both national companies and international companies. In the case of Genting International, because the company was based in Singapore, it had every right to participate in the bid if the bid had been opened to Singaporean companies alone. At the same time, the company was in position to undertake a foreign market entry as an international company. The reason that has made this situation possible in most cases is that the different owners who come from different countries have always registered parts of the company in their respective countries (Savior, 2009). When a bid for international companies arise therefore, it is the owner with registration in a different country who participants in the bid so as to create a foreign market entry. Advantages of the present Foreign Market Entry For Genting International and Las Vegas Sands who have own the two places available in the bid, there are several advantages that they are going to reap as foreign companies who have made investments in Singapore. The first of such benefits has to do with the fact that these companies are fortunate to be coming from an industry that could be described as relatively new in Singapore because of the ban on the operations of casinos that had been on the hospitality industry for a long time. Indeed, now that these companies are coming in with such a vast amount of investment, they are going to great a pioneering brand that would forever become a legacy in the casino industry in that country. If well monitored, this is going to be a major competitive advantage for future entrants into that sector of the economy. The reason for this assertion is that by the time new companies come in, these two companies might have had their names settling well with customers. They might have also created a very formidable organizational culture would be too familiar with their customer for the customers to change them. Without any doubt, tax moratorium that the two companies have ten years to benefit from because they are foreign companies is not something that can be overlooked as an important merit at all. In a recent research, it was discovered that 12% of companies that were liquidated in the United Kingdom from the year 1992 to 2002 suffered that fate because of their inability to grow beyond 2% a year (Gardener, 2007). Further investigations proofed that whereas these companies could not record 2% of growth over their total revenues, they were paying over 7% of taxes over their total revenues. In congruence, it could be said that these companies collapsed because of huge tax demands. This is certainly a situation that for the next ten years, the winning bidders are going to be exempted from. Clearly, the amounts of money that should have gone into the payment of taxes for all these ten years can be channeled to other sectors of growth, expansion and development. If for nothing at all, the companies can be investing these amounts in long term financial investment policies so that when they start paying taxes, they would not suffer any shocks in terms of decline of revenue. Challenges associated with the present Foreign Market Entry Genting International and ...Show more

Summary

Ownership in Foreign Direct Investment Type of Ownership One significant feature that is seen about the type of ownership that prevails in Genting International’s situation is that even though the mother company could be generally described as a foreign company, the delivery company, which is Genting International itself, is based in Singapore…
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