Foreign Investment is a very important tool of soft imperialism in Victoria 2. Great Powers can invest in both infrastructure (railroads) and Factories in civilized nations.
A civilized nation offers up 75% of its market to its sphere master; a secondary power offers up 50%. The rest goes to the world market, unless its sphere master has invested in it. If only the sphere master has invested, then the entire market of the nation goes to it. If several nations have invested, a fraction of that remainder goes to the sphere master according to the percentage of the investment they own.
For example, if the sphere master has invested 5,000 in a secondary power, and another nation has invested 20,000, the sphere owns 20% of the investment and the second nation owns 80%. The sphere master has access to their base 50% of the market plus 20% of the remainder, 10%, giving a total market access of 60%.
Not only can it secure access to the remainder of a civilized or secondary power's market for its sphere master, but it can have a major effect on the race for influence that must be undertaken to add a nation to a sphere of influence, or keep it there. A nation does also get industrial points for factories invested in although this is negligible.
Once a nation has invested money in the target nation's industry, all other nations attempting to influence it will suffer a -50% penalty to their influence gain unless they invest as well.
Should they invest, the penalty will be reduced proportionate to the amount of foreign investment in the nation that belongs to the influencing nation. For example, if a nation invests 10,000 in a target country, a second nation that does not wish to face the full 50% penalty can invest. If the nation invests 30,000 of their own money in the nation, they will own 75% of the investment, and so remove 75% of the penalty (reducing it to 12.5%). The original nation, now owning 25% of the foreign investment rather than 100%, will suffer 75% of the full penalty (37.5%).
There are only a few ways, that an investment can be lost:
- A secondary power can remove a great powers investment, with the decision Seize the means of production.
- The nation in question ceases to exist
- The factories go bankrupt and gets deleted
- The nation rises to great power status themselves.