Special Report

Countries Dominated by Foreign Investment

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15. Maldives
> Foreign direct investment as pct of GDP: 11.78%
> Foreign direct investment: $440.7 million — #94 lowest of 195
> GDP: $3,742.8 million — #36 lowest of 195

The developing island nation in the Indian Ocean, a getaway destination for the rich and famous, attracts most of its foreign direct investment via tourism, followed by the transport and telecom sectors. Most of the tourism investment is in resort management. India is the largest investor in the Maldives, which opened to foreign investment in the late 1980s. Foreign companies can own land, but ambiguous foreign-investment laws discourage investors. Most land is owned by the government and then leased to private owners or developers.

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14. Macao SAR, China
> Foreign direct investment as pct of GDP: 11.79%
> Foreign direct investment: $6,508.5 million — #32 highest of 195
> GDP: $55,204.8 million — #81 highest of 195

Foreign investments in Macao, the special administrative region of China and former Portuguese colony, are concentrated in the gambling, banking, and tourism sectors (hotel industry). The main investing countries are Hong Kong, British Virgin Islands, Cayman Islands, Mainland China, Portugal, and the U.S.

Among the projects underway are casinos, hotels, airport extension, and bridges. In September 2016, the government of Macao and China announced a five-year development plan that included establishing trade cooperation between Mainland China and Portuguese-speaking countries. Macao does not impose restrictions on capital flows and foreign exchange operations, but exporters are required to convert 40% of foreign currency earnings into Macao’s currency.

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13. Mongolia
> Foreign direct investment as pct of GDP: 12.91%
> Foreign direct investment: $1,719.1 million — #64 highest of 195
> GDP: $13,313.0 million — #67 lowest of 195

Mongolia’s economic growth has been dependent on trade of commodities such as copper, whose prices and demand crashed during COVID-19. The pandemic also forced the closure of its border with China, one of its main trading partners.

The sectors attracting the most foreign investment are mining, oil, and construction. Strip mining in Mongolia has become an environmental problem in that country. Mongolia is also building its first oil refinery, expected to be commissioned in 2022, with financial and technical assistance from India. Mongolia’s main investment partners are Russia, Canada, Great Britain, and the United States.

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12. Cambodia
> Foreign direct investment as pct of GDP: 14.04%
> Foreign direct investment: $3,624.6 million — #43 highest of 195
> GDP: $25,808.6 million — #96 lowest of 195

Political stability and open investment policies have made Cambodia an attractive destination for foreign investors. Incentives include 100% foreign ownership of companies; corporate tax holidays for up to eight years; duty-free import of capital goods; and no restrictions on capital repatriation. Like many countries on this list, Cambodia has created special economic zones (23 of them) that provide companies with ready access to land, infrastructure, and other services.

The economic sectors receiving most of the FDI inflows are construction, clothing, electrical and electronic components, and agriculture. The countries investing most in Cambodia are China, South Korea, Vietnam, Japan, and Singapore.

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11. Grenada
> Foreign direct investment as pct of GDP: 14.28%
> Foreign direct investment: $148.8 million — #68 lowest of 195
> GDP: $1,042.1 million — #13 lowest of 195

The tiny Caribbean island saw FDI inflows rise during the pandemic. Not surprisingly, tourism attracts most foreign investment, followed by the construction sector. The nation’s Citizenship-by-Investment program offers a basket of benefits — including a fast track to citizenship — to attract more investments. There are no restrictions on foreign ownership or control.

The largest foreign investors are Trinidad and Tobago, the U.S., and Great Britain. Grenada has signed up for China’s Belt and Road funding, and China has submitted a development plan that includes projects such as a highway and a railway.

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