The FDI Regulatory Restrictiveness Index (FDI Index) measures statutory restrictions on foreign direct investment in 58 countries, including all OECD and G20 countries, and covers 22 sectors. The FDI Index is currently available for 7 years: 1997, 2003, 2006, 2010, 2011, 2012, and 2013.
Measuring FDI restrictiveness
The FDI Index gauges the restrictiveness of a country’s FDI rules by looking at the four main types of restrictions on FDI:
- Foreign equity limitations
- Screening or approval mechanisms
- Restrictions on the employment of foreigners as key personnel
- Operational restrictions, e.g. restrictions on branching and on capital repatriation or on land ownership
>> Data by measure and year
The FDI Index is not a full measure of a country’s investment climate. A range of other factors come into play, including how FDI rules are implemented. Entry barriers can also arise for other reasons, including state ownership in key sectors. A country’s ability to attract FDI will be affected by factors such as the size of its market, the extent of its integration with neighbours and even geography.
Nonetheless, FDI rules are a critical determinant of a country’s attractiveness to foreign investors. Furthermore, unlike geography, FDI rules are something over which governments have control. FDI restrictions tend to arise mostly in primary sectors such as mining, fishing and agriculture, but also in media and transport.
The 2010 update on the OECD's FDI Restrictiveness Index gives more information about how the FDI Restrictiveness Index is calculated.
1 August 2013 - Based on the FDI Index, Korea was the biggest reformer of its policies towards FDI between 1997 and 2010 among a sample of 40 developed and emerging countries. This working paper looks at the lessons can we draw from the Korean experience about how to achieve rapid and sustainable reforms.
Methodology used to calculate the FDI Index
Foreign Direct Investment (FDI) Statistics - OECD Data, Analysis and Forecasts
OECD Investment Policy Reviews
Capital flows and the Code of Liberalisation of Capital Movements
Declaration on International Investment and Multinational Enterprises
How OECD investment instruments
promote greater openness
The Codes of Liberalisation of Capital Movements and Current Invisible Operations are legally binding for OECD countries, stipulating the right of establishment and progressive, non-discriminatory liberalisation of capital movements and international financial and other services. The approach of the Codes involves unilateral rather than negotiated liberalisation. Their observance makes full use of the OECD’s “peer pressure” method.
In parallel, under the National Treatment instrument countries agree not to discriminate against foreign investors established on their territory.