This document defines foreign direct investment as investment from foreign companies into enterprises operating in a different country. It describes three types of FDI: horizontal FDI which duplicates home country activities abroad, platform FDI which uses a destination country to export to a third country, and vertical FDI which moves value-adding activities stage by stage across international borders. The document also lists advantages of FDI such as economic growth and technology diffusion, and disadvantages including potential cross-cultural conflicts and inflation.