A review of incentive policies to attract foreign direct investment in the industrial sector

Investment is a crucial driver of economic development, foreign direct investment (FDI) playing a pivotal role in fostering growth through technology transfer, market expansion, and job creation. Governments worldwide employ various incentives to attract FDI, including tax reductions, grants, infrastructure development, and legal protections. This article examines the effectiveness of investment incentives and their role in shaping economic strategies, focusing on the balance between their advantages and potential drawbacks. Different forms of investment incentives, such as tax-based incentives, infrastructure support, legal frameworks, and green incentives, and their impact on attracting foreign capital are also evaluated. Additionally, the study highlights the challenges posed by barriers to investment, including economic instability, legal complexities, and political risks. Recommendations are provided for improving the design and implementation of investment policies to enhance their effectiveness and attract more foreign capital, particularly in less developed regions. This research underscores the necessity for a comprehensive approach to investment incentives, ensuring that they contribute to long-term sustainable economic development.

Keywords:

Foreign Direct Investment , Investment Incentives , Tax Incentives , Economic Development