Direct investment is a category of international investment that reflects the objective of a resident entity in one economy obtaining a lasting interest in an enterprise resident in another economy. The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. An ownership of at least 10 per cent of the voting power of the enterprise is evidence of such relationship. Direct investment covers all transactions between direct investors and direct investment enterprises within the Foreign Direct Investment Relationship (FDIR). Financial instruments covered under direct investment include equity, reinvestment of earnings and debt instruments (such as inter-company loans and advances, trade credits).
Under BPM6, direct investment is presented according to assets and liabilities basis. Asset refer to all investment abroad by both direct investors and direct investment enterprises in Malaysia, while liabilities refer to all investment in Malaysia by both direct investor and direct investment enterprises abroad.
Under BPM5. direct investment is presented according to directional principle basis. DIA is derived by netting off the assets of Malaysia's direct investor with its liabilities, while FDI is derived by netting off the liabilities of Malaysia's direct investment enterprises with its assets.