FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES: LEGAL CHALLENGES AND ECONOMIC BENEFIT

Abstract

Foreign Direct Investment (FDI) is a critical engine of economic growth in developing 
nations, providing transformative advantages such financial inflows, technology 
improvements, infrastructure development, and job creation. However, FDI has substantial 
legal and regulatory concerns, such as political instability, poor institutional frameworks, and 
reliance on foreign money. This article investigates the dual nature of FDI, including its 
advantages, problems, and legal frameworks. The research illustrates the economic benefits 
presented by FDI while addressing the accompanying environmental, social, and governance 
concerns, using case studies such as Brazil's energy sector, China's infrastructure investments 
in Africa, and Peru's mining industry. Policy reform recommendations emphasise the need to 
streamline bureaucratic processes, increase environmental and labour rights, and strike a 
balance between investor protections and host nations' sovereignty