Direct investment refers to the way that investors directly set up factories and shops to engage in business, or invest a considerable number of shares in enterprises, thus having operational control over enterprises. The main feature of direct investment is that investors have permanent interests in enterprises in another economy. Permanent interest refers to the long-term relationship between direct investors and enterprises, which has a considerable impact on enterprise management. Direct investment can take the form of directly setting up branches abroad, or buying a certain proportion of shares of foreign enterprises. Investment subsidy (fixed assets investment subsidy funds in the central budget) refers to the investment subsidy funds arranged by the fixed assets investment in the central budget (including national debt project funds) and specially given to qualified fixed assets investment projects.

Investment subsidy is one of the ways of government capital investment, which is mainly used for projects that have the ability to repay the loan principal. Investment subsidies are mainly applicable to economic and social fields that need government support. Mainly includes:

(1) Public welfare and public infrastructure projects;

(2) Projects to protect and improve the ecological environment;

(3) Projects to promote economic and social development in underdeveloped areas;

(four) projects to promote scientific and technological progress and high-tech industrialization;

(five) other projects that meet the relevant provisions of the state.

Government reward is a form of subsidy given by the government to enterprises in the form of financial allocation, such as financial discount and financial subsidy. Income of this nature belongs to fiscal funds and is tax-free income.