Definition: Foreign direct investment income

Category: Foreign direct investment

FDI income consists of income on FDI equity and of interest payable on inter-company debt. Income on equity consists of dividends due for payment in the period to the direct investor, gross of withholding taxes, plus the direct investor’s share of the company’s reinvested earnings. The calculation of income on equity requires information on the total profits from the current operations and the distributed dividends of the enterprise. This information is often available with a delay which leads to the necessity for estimating reinvested earnings from projections of total profits to provide income on equity data. Interest payable on inter-company debt is interest accrued during the period by the enterprise to the direct investor and includes interest on the borrowing and the lending of funds including debt securities and suppliers’ credits. http://ec.europa.eu/eurostat/ramon/coded_files/fdi_yearbook_2007.pdf