indirect investment Definition | Law Insider (2024)

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Indirect investment Definition | Law Insider? ›

indirect investment means a form of investment through the purchase of shares, share certificates, bonds, other valuable papers or a securities investment fund and through other intermediary financial institutions whereby investors do not directly participate in the management of investment activities.

In DI, investors can control the risks and returns of the investment as the investor has the ownership right of the assets. Indirect Investment(II) in RE is classified as the investment type in which the investor buys the stocks or the shares of the company which is privately owned by that company.

This type of investment is also sometimes referred to as a foreign portfolio investment (FPI). Indirect investments include not only equity instruments such as stocks, but also debt instruments such as bonds.

Investment by an Indian company (which is owned or controlled by foreigners) into another Indian entity is considered as Indirect Foreign Investment (IFI). It is also known as downstream investment.

An indirect investment can be undertaken by purchasing the shares of an investment company. An investment company sells shares in itself to raise funds to purchase a portfolio of securities.

Indirect investment is investment done through intermediaries. Indirect investment is designed to make investing easier for the retail investor. The need for indirect investment comes from the difficulty of investing directly in security. Let us take the case of stocks, for example.

To conclude, direct securities are those that a borrower directly uses as a pledge against the loan, whereas indirect securities are securities provided by a third-party (a guarantor) that will take responsibility for the loan repayment should the borrower default on it.

Indirect investor means a partner or other investor that holds an interest in a pass-through entity that itself holds an interest, directly or through another indirect partner or other investor, in a pass-through entity.

Indirect property investment has a number of advantages as opposed to direct property investment including: Lower up-front capital investment. Reduction in management costs. Improved asset liquidity.

Indirect costs can include performance fees, investment-related legal, accounting, auditing and other operational and compliance costs The aggregation of these indirect costs are divided by the average net asset (this being the size) of the fund and presented as a percentage. Investment Manager.

What are the types of indirect property investment? ›

There are three key types of indirect property investments: land banking schemes, shares in property companies and real estate investment trusts (REITs).

Key Takeaways. An inward investment consists of foreign entities investing in local economies bringing in foreign capital. Foreign direct investment is a specific type of inward investment, consisting of mergers and acquisitions or establishing new operations for existing businesses.

Foreign direct investment is building or purchasing businesses and their associated infrastructure in a foreign country. Direct investment is seen as a long-term investment in the country's economy, while portfolio investment can be viewed as a short-term move to make money.

Solution. All incomes other than direct incomes are called indirect incomes. [e.g. Interest received on investments, Incomes like discount, commission, dividend, rent etc.

Indirect Transaction means a Transaction that is entered into for a business activity not related to the performance of any part of the Work under this Contract.

Stock market investment is a direct investment option open to investors. According to the tax and investment experts both are market-linked investment options but in the stock market, investors need to choose the stock they want to invest in themselves and then invest directly.

Direct investment provides capital funding in exchange for an equity interest without the purchase of regular shares of a company's stock. Direct investment may involve a company in one country opening its own business operations in another country.

Direct investment takes different shapes and forms. A company may enter a foreign market through so-called greenfield direct investment, in which the direct investor provides funds to build a new factory, distribution facility, or store, for example, to establish its presence in the host country.

Diversification through indirect investing is the idea of not placing all of your eggs in one basket to spread out the risk of investing. With direct investing, because of the significant capital outlays of acquiring an asset yourself, you're typically limited to acquiring one or two properties under your portfolio.

Foreign direct investments are when investors purchase a physical asset such as a plant, factory, or machinery in a foreign country. In contrast, foreign indirect investments are when investors buy stakes in foreign companies that trade on their respective stock exchanges.