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A form of direct foreign investment in which an investing entrepreneur holds a minority ownership position in a foreign venture is known as a(n) .

Question

A form of direct foreign investment in which an investing entrepreneur holds a minority ownership position in a foreign venture is known as a(n) .

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Solution

The situation described refers to a type of foreign investment known as "passive investment" or often referred to specifically as a "minority stake" investment. In this arrangement, the investing entrepreneur does not have a controlling interest in the foreign venture but holds a smaller proportion of ownership, usually less than 50%. This type of investment allows the investor to benefit from the venture's potential profits while limiting their exposure to risk and maintaining a degree of independence. Such investments are often made to diversify risk or as part of a strategic partnership while not directly managing or controlling the foreign entity.

In summary, the answer to your question is that this form of direct foreign investment is known as a "minority investment."

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