Innovations in Foreign Direct Investment Attraction

Incentives Policy and Negotiation Good Practice Scorecard

A. Incentives policy

1. What are the objectives of incentives?

2. What types of incentives are on offer?

3. Are incentives aligned to the needs of different sectors?

4. Are they linked to performance targets?

5. Do these meet the objectives?

6. Are the incentives clear to investors?

B. Negotiation / Processing 1. Who can get the incentives?

2. Who allocates/awards the incentives?

3. Is the negotiation process predictable and transparent?

4. Are the incentives needed to win the project?

5. What will be the return on investment?

C. Approval

1. What is the process for awarding incentives?

2. Is it politicised?

3. How speedy and fair is the process?

D. Post-approval

1. What happens after approval?

2. Is there monitoring of performance targets?

3. Do investors receive the incentives?

4. Are there effective “claw back” mechanisms if investors do not meet targets?

Source: WAVTEQ based on Loewendahl (2001) “Bargaining with Multinationals”.

2.5 AFTERCARE

Aftercare refers to the post-investment services provided to investors to encourage 

them to expand and deepen their operations in the location. The scorecard below 

provides a checklist for good practices in aftercare covering policy, techniques and 

resources. 

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