Innovations in Foreign Direct Investment Attraction

2.3 

INVESTMENT FACILITATION  

Effective facilitation is very important when the investor needs to secure permits, 

licenses and approvals to establish operations in the country. Typically, developing 

countries have many more procedures for investors than developed countries, and 

the IPA plays a key role in assisting investors to facilitate their projects. Many IPAs 

have established a “one-stop-shop” to provide all the approvals and clearances need-

ed.

8

  

Investment Facilitation Services Good Practice Scorecard

A. Permits and licenses 1. What permits and licenses do investors need to apply for?

2. What do investors think about these?

3. How do they compare to competing locations?

B. Application

1. Is there a clear roadmap for navigating the procedures and making the applica-

tion?

2. Is technology used to make the process efficient?

C. Process

1. Is the process predictable and transparent?

2. Is the process politicized?

3. Who has responsibility for the process?

8  For example, see IMF (2006) “Establishing a Successful One Stop Shop: The case of Egypt” and OECD (2006) “Policy Framework for Investment: Review of Good Prac-

tices”.

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D. Approval

1. 

Is there a clear evaluation framework for authorizations?

2. 

Is there a target timeframe for approvals?

3. 

Is there a key point of contact for the investor?

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

2.4 INCENTIVES

Most countries offer financial incentives for investment projects, which foreign in-

vestors can apply for. Incentive policies vary considerably across countries and with-

in the LAC region (for data on incentives in the region see 

www.incentivesmonitor.

com

). In most developing countries, the primary investment incentives are tax and 

other benefits from investing in an economic zone (e.g. a free trade zone), while in 

most developed countries incentives are typically discretionary investment packages 

offered to a specific investor for a specific project. Within LAC, some countries such 

as Brazil, Chile and Mexico also offer negotiated incentives packages to investors. The 

scorecard below outlines key issues in good practices in incentives policy, negotia-

tions/processing of incentives applications, approvals, and post-approval practices.