Non-Equity Modes of Investment (NEMs), are forms of foreign investment that do not involve the purchase of equity in the host country’s companies, and include contractual arrangements such as licensing, franchising, management contracts, and turnkey projects.

NEMs can:

• Transfer technology and management know-how from the foreign investor to the host country, and facilitate employment opportunities and skill building through training programs, improving the competency of local businesses and workers
• Generate revenue in the host country through licensing fees, royalties, and service fees
• Provide foreign investors access to new markets and reduce investment risk by enabling greater control over the operation and sharing costs and risk with local partners