Question

Select a foreign market that you will be entering and explain how the foreign investment will be financed and how the financial structure of the foreign affiliate should be configured.

Answer 1

Let.s say we are an MNC entering in India
We can enter in the market through equity as well as debt mode.
Ways of investment
1. Direct
2.Joint Venture
3. By forming an Indian Subsidiary

4. Acquiring an Indian company

5. Venture Capital
6. M&A
Depending upon the FEMA guidelines/ country guidelines for the specific sector.
since 100% FDI is allowed for IT sector

Before investing in the new country one must look at
Tax structure
Eco political structure
Profitable form of business - i.e local manufacturing or import . In case of India local manufacturing is better as import duty is high and labor is cheap

Avoid Double taxation
Local financing or global financing :- Global financing is cheap but laws are more relaxed in India
Structure that minimizes the cost of capital should be adopted