Difference between Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII)

1. FDI means when an organization of one nation makes an investment in any organization of another country. FII means where an organization of any country makes an investment in the stock market of another country.

   2. FDI is made to acquire to controlling ownership in an enterprise. FII tends to invest in the foreign financial market.

   3. FDI brings long term capital. FII brings long term as well as short term capital.

   4. FII is a way to make quick money, the entry and exit to stock market is very easy whereas the entry and exit are not easy in FDI.

   5.In FDI, there is transfer of funds, resources, technology, strategies, know-how. In FII, involves transfer of funds only.

   6. FDI results in increase in the country’s productivity. As opposed to FII that results in the increase in the country’s capital.