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RISKS OF FDI - Coggle Diagram
RISKS OF FDI
Financial Risk
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Decline in asset value, revenue, and profit
Political Risks
Political Instability: Changes in government, civil unrest, or political upheaval can disrupt the business environment.
Regulatory Changes: New laws or changes in existing regulations (taxation, labor laws) can affect operational costs and compliance requirements.
Cultural Risk
Differences in consumer behavior, values, and mindset
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Legal Risk
Lack of understanding of local laws (tax, license, accounting…
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Economic Risks
Economic Instability: Fluctuations in economic conditions, recession, or changes in monetary policy can impact investment returns.
Currency Fluctuation Risks: Volatility in exchange rates can erode profits, especially for businesses involved in international trade.
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Market Access Risks
Trade Barriers: Tariffs, quotas, and bureaucratic hurdles can impede market entry and expansion.
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