How open is each economy to foreign investment?

The OECD FDI Regulatory Restrictiveness Index (FDIRRI) gauges the restrictiveness of an economy’s statutory rules on foreign direct investment. It covers OECD members, G20 economies and a range of other countries, and scores 22 economic sectors. Each sector score runs from 0 (open) to 1 (closed); the headline index is the average across sectors.

Four types of measures are scored:

• Foreign equity limits — caps on the share of a company foreigners may own. These carry the most weight; an outright ban on foreign ownership in a sector scores the maximum.
• Screening and approval — discriminatory screening or prior-approval requirements for foreign investors, including net-benefit or national-interest tests.
• Restrictions on key foreign personnel — nationality or residency requirements for managers and board members, and limits on employing foreign key staff.
• Other operational restrictions — for example limits on branching, capital repatriation, or foreign ownership of land.

The index looks only at rules on the books that discriminate against foreign investors. It does not measure how rules are implemented or enforced, the discretion exercised in screening, state ownership and monopolies, or wider investment climate factors such as tax, infrastructure or the rule of law. Preferential treatment for export-oriented investors and special economic zones is also not taken into account. Two economies with similar scores can therefore feel very different to investors.