foreign portfolio investment (fpi) is the capital inflow from one country to another that takes the form of portfolio investment, which is more liquid and involves less control than direct investment. foreign portfolio investment is a type of passive investing where investors purchase securities of foreign companies, but do not actively participate in the management of those companies. the term "passive" means that the investors are not involved in the day-to-day operations of the companies they invest in; they simply buy securities and hope that their value increases over time.