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Outbound Capital Flow

Definition

Outbound capital flow refers to the movement of financial resources from a domestic economy to foreign countries. It includes investments, loans, and purchases of assets made by domestic individuals or entities in foreign markets.

Analogy

Imagine you decide to invest your savings in a business opportunity overseas. This is similar to outbound capital flow, where money flows out of your country's economy and into another country's economy.

Related terms

Inbound Capital Flow: Inbound capital flow is the opposite of outbound capital flow. It refers to the movement of financial resources from foreign countries into a domestic economy.

Repatriation of Profits: Repatriation of profits occurs when multinational corporations send back earnings generated in a host country back to their home country.

Offshore Investments: Offshore investments are investments made by individuals or companies outside their home country for various reasons such as tax advantages or diversification.