Full Text

indigenization laws

John O'Connell


Subject Business and Management » International Management


Extract

In order to restrict (and therefore control) foreign ownership of organizations operating within its borders a government may establish a minimum percentage of ownership by local nationals. These restrictions are referred to as indigenization laws. It is not uncommon for developing countries to require that at least 51 percent of ownership be held locally. This allows foreign investment to take place while still retaining local control. This protectionist position may allow a greater percentage of foreign ownership as time passes, thus allowing the industry to become more firmly embedded in the host country's economy. See also barriers ... log in or subscribe to read full text

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