Question

In which situation a production unit is not considered as a foreign production unit: (a) entire capital is invested by non resident (b) more than 50% of the total capital is invested by non-residents (c) Residents have more than 50% of the total capital (d) Less than 20% of the investment is made by resident

Answer 1

Answer: Portfolio investment

Explanation: It is the investment made by the residents of nation in rest of world in some securities like shares, bonds etc , but such investment does not provide the buyer full control over the purchased asset.

Answer 2

A foreign manufacturing unit is in the nation but owned by the country's nationals or non-residents. The input of foreigners in such manufacturing units must be more than 50% of the total capital.

Answer - (Option B)

Explanation:

• Furthermore, overseas manufacturing units are categorized into:  multinationals and Collaboration.
• Multinationals - These are companies that have their headquarters in one nation but are spreading their company operations in many nations.
• Collaboration - These are manufacturing units with joint involvement of foreigners and national entrepreneurs. Such units of manufacturing are sometimes native and sometimes foreign.