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There are a number of factors that an investor would take into consideration when deciding in which country to locate an investment project. To what extent would you consider incentives granted by the host State to be a determining factor in attracting such investment? When a company is deciding where to locate its business it takes into consideration various locations. The evaluation of an investment opportunity necessitates exploration and consideration of a host of factors. The term ‘investment climate’ sums up all the factors - political, social, economic, financial, etc. which influence an investment decision. An important determinant of any investment decision is without doubt the economic factors which mainly determine the manufacturing costs, production methods to be used and the product mix of a particular industry. Another extremely important factor considered in an investment decision and eventually in plant location is the position of a particular region or country on the map. This is especially relevant with regards to the availability of raw materials and the adequacy and costs of communication and transport systems. A scrutiny of the financial factors involved is also very important. In order to encourage foreign private investors to come and invest in them, all countries continue to grant material, fiscal and non-fiscal incentives. Perhaps the most popular and widely used of these incentives are tax incentives. One of the best ways of using taxation for development planning purposes is to tax activities which one wishes to discourage and subsidise through tax incentives the types of priority activities and projects which the wish to encourage.
Approximate Word count = 1023
Approximate Pages = 4.1
(250 words per page double spaced)
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