The role of government tax regulations on attracting foreign investments

Abstract

Foreign direct investment is a cornerstone of economic growth, technology transfer, and job creation in developing and developed economies. Among the many factors influencing investment decisions, government tax and customs policies play a decisive role. Competitive corporate tax rates, targeted tax incentives, and predictable fiscal frameworks reduce operational costs and signal stability to international investors. At the same time, efficient customs regimes marked by simplified procedures, reduced tariffs, and transparent regulations lower trade barriers and enhance supply chain reliability. Together, these policies not only improve the ease of doing business but also foster investor confidence by minimizing uncertainty and administrative burdens. This article presents how balanced, transparent, and strategically aligned tax and customs policies are essential tools for governments seeking to attract and retain foreign investment, ensuring long-term economic competitiveness. In addition the article gives some recommendations on improving tax system and customs clearance practices to make the investment environment appealing to foreign investments.