question: What happens when an american start-up company that's funded by a foreign investor becomes profitable? Is the foreign investor kind of like its owner?
comment: Depending upon how the funding was arranged. If it was a loan then no the company is owned by whoever started the company, but if they can't pay the loan then the company assets may default to who loaned them the money. If the money was exchanged for a proportion of the company it might be split between the original people and the funders.
passages: The foreign direct investor may acquire voting power of an enterprise in an economy through any of the following methods:
  
  BULLET::::- by incorporating a wholly owned subsidiary or company anywhere
  
  BULLET::::- by acquiring shares in an associated enterprise
  
  BULLET::::- through a merger or an acquisition of an unrelated enterprise
  
  BULLET::::- participating in an equity joint venture with another investor or enterprise
  
  Section::::Methods.:Forms of FDI incentives.
  
  Foreign direct investment incentives may take the following forms:
  
  BULLET::::- Low corporate tax and individual income tax rates
  
  BULLET::::- tax holidays
  
  BULLET::::- other types of tax concessions
  
  BULLET::::- preferential tariffs
  
  BULLET::::- special economic zones
   Section::::Mark to market.
   Section::::Disadvantages.
   White House data reported in 2011 found that a total of 5.7 million workers were employed at facilities highly dependent on foreign direct investors. Thus, about 13% of the American manufacturing workforce depended on such investments. The average pay of said jobs was found as around $70,000 per worker, over 30% higher than the average pay across the entire U.S. workforce.
   One of the major advantages of turnkey projects is the possibility for a company to establish a plant and earn profits in a foreign country especially in which foreign direct investment opportunities are limited and lack of expertise in a specific area exists.
   BULLET::::1. Firm-specific advantages: Once domestic investment was exhausted, a firm could exploit its advantages linked to market imperfections, which could provide the firm with market power and competitive advantage. Further studies attempted to explain how firms could monetize these advantages in the form of licenses.
   BULLET::::- Different size of companies may cause domination of one firm or unequal agreement, which is not favourable for long-term running (Lilley and Willianms, 1991)
  
  BULLET::::4. Financial capability
  
  BULLET::::- The partners can generate sufficient financial resources to maintain the venture's efforts, which is also important for long-term partnership (Lilley and Willianms, 1991)
   The second problem with FDI's definition is the meaning of "control." The U.S. Department of Commerce has defined FDI as when a single foreign investor acquires an ownership interest of 10% or more in a U.S. firm. The number 10%, however, is somewhat arbitrary, and it is easy to see how the Commerce Department's definition might not capture all instances of actual foreign control. For example, a group of investors in a foreign country could buy 9% of a U.S. firm and still use that ownership to exercise some measure of control. Alternatively, a foreign investor that purchases 10% of a U.S. firm may have no intention of exercising control over the company.
   QEF status applies only to the shares of a particular shareholder acquired during a tax year for which the QEF election was in force, assuming that the QEF election remains in place throughout the holding period. Such status does not apply to other shareholders or to persons acquiring the particular shares.
   BULLET::::3. Propensity to formulate an internationalization strategy to mitigate risk: According to his position, firms are characterized with 3 levels of decision making: the day to day supervision, management decision coordination and long term strategy planning and decision making. The extent to which a company can mitigate risk depends on how well a firm can formulate an internationalization strategy taking these levels of decision into account.
   Section::::Joint venture.
  
  There are five common objectives in a joint venture: market entry, risk/reward sharing, technology sharing and joint product development, and conforming to the government regulations. Other benefits include political connections and distribution channel access that may depend on relationships.
  
  Such alliances often are favourable when:
  
  BULLET::::- The partners' strategic goals converge while their competitive goals diverge
  
  BULLET::::- The partners' size, market power, and resources are small compared to the Industry leaders
  
  BULLET::::- Partners are able to learn from one another while limiting access to their own proprietary skills
   BULLET::::- Geographical constraints – When there is an attractive business opportunity in a foreign market, partnering with a local company is attractive to a foreign company because penetrating a foreign market can be difficult both because of a lack of experience in such market and local barriers to foreign-owned or foreign-controlled companies.
  
  BULLET::::- Funding constraints – When a company is confronted with high up-front development costs, finding the right JV can provide necessary financing and credibility with third parties.
   Section::::Theoretical background.
   BULLET::::- Using investment initiative to erode the other partners competitive position. This is a situation where one partner makes and keeps control of critical resources. This creates the threat that the stronger partner may strip the other of the necessary infrastructure.
  
  BULLET::::- Strengths gained by learning from one company can be used against the other. As companies learn from the other, usually by task sharing, their capabilities become strengthened, sometimes this strength exceeds the scope of the venture and a company can use it to gain a competitive advantage against the company they may be working with.
   Section::::History.:Separately Managed Accounts.
  
  Southeastern provides separately managed accounts for institutional investors with three mandates: U.S., Non-U.S. and Global. Its U.S. mandate dates back to 1975 and its Non-U.S. mandate began in 1998. In 2000, Southeastern created its Global separately managed account mandate for institutional investors, combining U.S. and non-U.S. companies in one portfolio in 2000.
  
  Section::::History.:Longleaf Partners UCITS Funds.
  
  Longleaf Partners’ Global UCITS fund was created in 2010 for investors outside of the U.S. In 2012, the Longleaf Partners U.S. UCITS Fund was launched for investors outside of the U.S. to invest in U.S.-based companies.
  
  Section::::Leadership.
  
  Section::::Leadership.:Mason Hawkins.
   Section::::Licensing.
  
  An international licensing agreement allows foreign firms, either exclusively or non-exclusively to manufacture a proprietor's product for a fixed term in a specific market.
   A wholly owned subsidiary includes two types of strategies: Greenfield investment and Acquisitions. Greenfield investment and acquisition include both advantages and disadvantages. To decide which entry modes to use is depending on situations.
   Foreign market entry modes
  
  Foreign market entry modes or participation strategies differ in the degree of risk they present, the control and commitment of resources they require, and the return on investment they promise.
  
  There are two major types of market entry modes: equity and non-equity modes. The non-equity modes category includes export and contractual agreements. The equity modes category includes: joint venture and wholly owned subsidiaries.
  
  Section::::Exporting.
  
  Exporting is the process of selling of goods and services produced in one country to other countries.
  
  There are two types of exporting: direct and indirect.
  
  Section::::Exporting.:Direct Exports.
   Look-thru of 25% subsidiaries: Interests in 25% or more owned foreign corporations are treated similarly to partnership interests (i.e., looked through) for the income test and the asset test.
  
  Section::::Effect of PFIC status.
   BULLET::::1. Must own at least 10% of the startup and play a prominent role in the startup’s operations.
  
  BULLET::::2. The entrepreneur’s startup must have been formed in the U.S. in the preceding five years before applying.
  
  BULLET::::3. The startup displays the potential to have accelerated growth and benefit the U.S. economy with the creation of jobs. This potential is indicated by:
  
  BULLET::::- "Receiving significant investment of capital (at least $250,000) from certain qualified U.S. investors with established records of successful investments in the 18 months before applying."
   1) Your startup must operate in one of the following fields: 
  
  BULLET::::- Biotechnologies
  
  BULLET::::- Nanotechnologies
  
  BULLET::::- Information Technologies
  
  BULLET::::- Mechatronics
  
  BULLET::::- Electronics
  
  BULLET::::- Laser Technologies2) You must legally be at least a part owner of the newly founded firm.
  
  3) You must have enough financial resources to achieve your set business goals for 1 year. There is no set regulated amount, you decide how much capital you need to achieve your 1 year goals. 
   Most foreign portfolio investments consist of securities and other foreign financial assets that are passively held by the foreign investor. This does not provide the foreign investor with direct ownership of the financial assets and can be relatively liquid depending on the volatility of the market that the investment takes place in. Foreign portfolio investments can be made by individuals, companies, or even governments in international countries. This type of investment is a way for investors to diversify their portfolio with an international advantage. 
   BULLET::::- significant holding in the company (For example the team applying for the permit, has a holding of not less than 60% of the company.)
  
  BULLET::::- access to sufficient resources and funding for the company's early stage development
  
  BULLET::::- secure financial means for support
  
  Section::::Startup and Entrepreneur Visas By Country.:Ireland.
  
  Entrepreneurs and startups founders can apply to the startup visa targeted at innovative companies.
  
  Section::::Startup and Entrepreneur Visas By Country.:Italy.
   BULLET::::- Access to a larger market: Often times markets may be larger and less competitive outside of ones home country. For example, the market is much more competitive in the United States of America than in other less developed economies. Investors can take advantage of the less competitive markets internationally by using these Foreign portfolio investments.
   According to Luo and Tung (2007), EM MNEs use international expansion as a springboard to (1) compensate for their competitive disadvantages, (2) overcome their latecomer disadvantage, (3) counter-attack global competitors’ major foothold in their home country market, (4) bypass stringent trade barriers into advanced markets, (5) alleviate domestic institutional and market constraints, (6) secure preferential treatments from home governments, and (7) exploit competitive advantage in other emerging and developing countries. In so doing, EM MNEs overcome their latecomer disadvantage in global competition via a series of aggressive, radical, risk-taking foreign direct investment (FDI) measures by proactively acquiring or buying critical assets from mature, often Western-based MNEs to compensate for their competitive weaknesses. EM MNEs are both asset seeking (especially critical capabilities they need, such as global brands, key technologies, global talents and international channels) and opportunity seeking (especially leveraging their mass and cost-efficient production capabilities to tap other developing countries and low- to mid-end markets in developed countries).
  