What is a greenfield investment?
What is a greenfield investment? A green-field (also “greenfield”) investment is a type of foreign direct investment (FDI) in which a parent company creates a subsidiary in a different country, building its operations from the ground up.
Why is greenfield a good investment? The advantages of greenfield investments include increased investor control relative to investing in an existing local business, as well as the opportunity to form marketing partnerships and avoid intermediary costs.
What are the pros and cons of a greenfield investment? The pros of a Green Field Investment are; Financial incentives such as tax breaks and total control of the business venture. Complexity is planning a Green Field Investment, long-term commitment, and intensive capital need are some of the cons of this type of investment.
What is an example of a greenfield investment? Real-Life Examples Greenfield Investments
In 2007, Mercedes Benz entered the Indian market by purchasing 100 acres of land in Pune, Maharashtra, to establish its altogether new manufacturing unit. Similarly, In 2015, Toyota Motors had decided to set up its new plant in Mexico under Greenfield Investment.