FDI net inflows are the value of inward direct investment made by non-resident investors in the reporting economy. FDI net outflows are the value of outward direct investment made by the residents of the reporting economy to external economies. 

Inward Direct Investment, also called direct investment in the reporting economy, includes all liabilities and assets transferred between resident direct investment enterprises and their direct investors. It also covers transfers of assets and liabilities between resident and nonresident fellow enterprises, if the ultimate controlling parent is nonresident.

Outward direct investment, also called direct investment abroad, includes assets and liabilities transferred between resident direct investors and their direct investment enterprises. It also covers transfers of assets and liabilities between resident and nonresident fellow enterprises, if the ultimate controlling parent is resident. Outward direct investment is also called direct investment abroad.

Foreign direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy. As well as the equity that gives rise to control or influence, direct investment also includes investment associated with that relationship, including investment in indirectly influenced or controlled enterprises, investment in fellow enterprises (enterprises controlled by the same direct investor), debt (except selected debt), and reverse investment. Implementation of the Balance of Payments Manual 6th Edition (BPM6) methodology has brought changes to the definition of direct investment by making it consistent with the OECD Benchmark Definition of Foreign Direct Investment, notably the recasting in terms of control and influence, treatment of chains of investment and fellow enterprises, and presentation on a gross asset and liability basis as well as according to the directional principle.

Data on FDI flows are presented on net bases (capital transactions' credits less debits between direct investors and their foreign affiliates). Net decreases in assets or net increases in liabilities are recorded as credits, while net increases in assets or net decreases in liabilities are recorded as debits. Hence, FDI flows with a negative sign indicate that at least one of the components of FDI is negative and not offset by positive amounts of the remaining components. These are instances of reverse investment or disinvestment.