The Impact of Tax Policy on the Attractiveness of Foreign Direct Investment (FDI): An Analysis of National Strategies and Economic Effects

Abstract

In the context of globalization, the economic ties between countries are getting closer and closer, and capital flows are significantly stronger. Countries take measures to attract foreign direct investment (FDI), and among them, tax policy has a significant impact on the purpose of attracting foreign investment, as tax policy plays an important role in the country's macroeconomic policy. In this article, this paper will analyze the attractiveness of the tax policies adopted by FDI in recent years, and the impact of their tax policies on the economic effects of their respective countries, supported by the theories of internationalization, tax policy stability, and tax competition theory. Then, by summarizing and comparing the analysis, we can identify more attractive policies and analyze their reasons. Finally, it is concluded that tax policy plays a very important role in the development of the global economy, and countries can effectively attract foreign investment, promote economic growth and industrial upgrading by adjusting tax policies. However, due to the challenges of balancing attracting foreign investment with maintaining fair competition, tax base erosion and fiscal sustainability, countries need to improve policy transparency and stability, optimize the preferential tax structure, strengthen international tax cooperation and other measures to help their countries achieve higher quality development and bring higher economic benefits.