About Investing Across Borders

Investing Across Borders (IAB) is a new World Bank Group initiative comparing regulation of foreign direct investment (FDI) around the world. It presents indicators on countries’ laws, regulations, and practices affecting how foreign companies invest across sectors, start businesses, access industrial land, and arbitrate commercial disputes. More specifically:

• Investing Across Sectors indicators measure the degree to which domestic laws allow foreign companies to establish or acquire local firms. The indicators track restrictions on foreign equity ownership in 33 sectors, aggregated into 11 sector groups, including primary sectors, manufacturing, and services.
• Starting a Foreign Business indicators record the time, procedures, and regulations involved in establishing a local subsidiary of a foreign company (in the form of a limited liability company).
• Accessing Industrial Land indicators evaluate legal options for foreign companies seeking to lease or buy land in a host country, the availability of information about land plots, and the steps involved in leasing industrial land.
• Arbitrating Commercial Disputes indicators assess legal frameworks for alternative dispute resolution, rules for arbitration, and the extent to which the judiciary supports and facilitates arbitration. The indicators analyze national regimes for domestic and international arbitration for local and foreign companies.

The World Bank Group’s Doing Business project provides the methodological foundation for the IAB indicators. But while Doing Business measures regulation of domestically owned small and medium enterprises, IAB focuses on FDI.

The IAB indicators evaluate the text of laws and regulations as well as, to the extent possible, their implementation. The indicators are based on data collected through questionnaires completed by experts -- including lawyers, business consultants, and investment promotion specialists -- in each of the economies surveyed.

The IAB indicators aim to complement existing measures of the quality of business environments. Quantitative data and benchmarking can help stimulate policy debate and action, both by exposing potential challenges and by identifying where policymakers might look for lessons and good practices. Indicators can also provide a basis for analyzing how different policy approaches -- and different policy reforms -- can contribute to broader desired outcomes such as FDI, competitiveness, and growth.

IAB does not measure all aspects of the business environment that matter to investors. For example, it does not measure security, macroeconomic stability, market size and potential, corruption, skill levels, or infrastructure quality. Still, the indicators provide a starting point for governments seeking to improve their competitiveness in attracting foreign investment.