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Victoria 3 - Dev Diary #110 - Building Ownership & Foreign Investment

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Hello and welcome to another Victoria 3 Dev Diary!

After last week’s look at Power Blocs, we are going to take a look at another major set of changes that are going to arrive with Sphere of Influence and the free 1.7 update.

Namely, a revision of the Building Ownership system and what it allows us to do: Foreign Investment, a much requested feature which makes its debut in 1.7.

You will see that the changes we are making impact your visibility of ownership and the affected Pops throughout the game.

To understand all the mechanics we will be looking at an example country in the heart of Europe.

Ownership types​

It’s 1836. In Bavaria, a proud member of the Zollverein Power Bloc, all buildings are owned by the state or the workers themselves.

Capitalists, Aristocrats, and Clergymen no longer work in these buildings, and most of the Shopkeepers no longer work in production buildings directly. In addition, the Ownership Production Methods have been removed. Instead, ownership works on a per level basis, allowing a mixed ownership structure in the same building.

A popular Logging Camp it seems. Workers, a Financial District and a Manor House own a part.
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In worker-owned buildings employees work for themselves basically. So any dividends they may accumulate, they split amongst themselves. This is the default at game start for many countries (not all) and is a state which you can more or less return to at a later stage of the game with the enactment of Cooperative Ownership, which will expropriate your privately owned buildings over time.

One major exception from the ownership situation at game start are subsistence farms which are owned by a new building we are introducing: Manor Houses.

Now they lounge around in luxury, instead of slumming it with the common folks in less refined taste buildings, we wouldn't want their shoes to be dirtied on a subsistence farm!
Manor Houses are able to own levels of other buildings, in our case at game start all the levels of Subsistence Farms in their own states. They pay their wages and dividends by collecting dividends from the buildings they own and distributing them among their employees.
What type and how many employees they have is determined by a limited set of PMs.

Clergymen or Aristocrats? You can’t get rid of both of them!
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So you can see there are still jobs for Clergymen. What about the Shopkeepers and Capitalists?
Well, they work in the new Financial District buildings, which behave pretty much like the Manor Houses. They too have different employment PMs, can own levels of other buildings and pay their employees by collecting dividends from owned building levels.

Both new buildings expand automatically, depending on how many levels they own. For example if a new level of a privately owned factory is created, a corresponding new level of a Financial District is also generated.

All building levels that you construct are country-owned. Under certain laws, this status can change soon after they are finished constructing. Country-owned buildings come with reduced Economy of Scale bonuses and a bureaucracy cost for each level you own. But in return they can provide additional income based on the building’s dividends which partially get transferred to your treasury.

Not all buildings can be of any ownership type of course, for example barracks or government administrations will always be country-owned.

Summing up, there are now three types of ownership for any building level:
  • Worker owned
  • Privately owned (Financial Districts and Manor Houses)
  • Country owned

If all buildings in Bavaria are owned by the workers or the country itself, how do the first Financial Districts appear, you may wonder!

The main way to get that to happen is the next point on our agenda.

Privatization​

Enter Privatization, whereby you allow country-owned buildings to be sold to Pops.

If you are short on cash, Privatization might help you
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This makes it possible for your Pops to acquire them. Depending on the type of building you are privatizing, they usually get bought either by Aristocrats or Capitalists, using the investment pool’s funds.
If you don’t have any capitalists in your country yet, other Pops may step up though, using the investment pool’s funds to buy a building you put up for sale and become Capitalists in the process, which in turn leads to the first Financial District appearing.

The money will be transferred from the investment pool to your country’s treasury once that happens. The cost of buying a level is determined by its construction cost and is modified by most of the Economic System laws. These laws also affect the efficiency of these transactions, meaning how much money is lost as overhead and how much is being reinvested into the investment pool or the treasury.
One particularly interesting law is Laissez-Faire which upon enactment forces all your country-owned buildings to be put up for sale and will automatically do so for every new building level you construct. Similarly, enactment of other laws like Cooperative Ownership and Command Economy doesn’t immediately change the ownership of all buildings, but rather can start a process that can convert your economy over time.

Insert witty joke about the free market here
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Now let’s take a look at how the different ownership model affects investments from your Pops.

Investment​

The existing logic for how the private investment pool works remains similar to before. So, different Pop types still have different priorities and they will look at factors like estimated productivity, available workforce etc.
When a building is about to be constructed by private investment, we randomly determine who is building it, favoring already existing Financial Districts and Manor Houses over creating new ones.

In a worker-owned economy, the private investment pool will continue to function, but they will only expand their own buildings, not create new ones.

An important fact with this system is that investments do not need to be local. A Financial District or Manor House can invest in any of your country’s states, including your colonies overseas.
This system will create a flow of money from the colonies to your homelands, a stronger centralization of wealth and power and it will end the status of colonies’ Pops making more money than your Pops at home.

Of course the non-local investments also come with some challenges with regards to other countries.

It looks like Prussia has heard about that option and has started investing in your country!

“First they took our chairs, then the tables we used to eat at. What’s next? Our beds?!”
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Foreign Investment​

There are a few ways to acquire Foreign Investment Rights.

First of all, overlords can always invest in their subjects. This is part of the free 1.7 update and will allow you to do Foreign Investment where it matters the most, even if you do not own Sphere of Influence.

Then there are three diplomatic pacts which you can use if you have bought the expansion:
  1. Mutual Investment Rights which allows both countries to invest in each other
  2. One-directional Investment Rights in either direction, so you either demand to be allowed to invest in their country or offer another country to invest in yours

The [redacted] has been [redacted]. We shall see its effects on the 11. of April.
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There is also a Power Bloc Principle group that deals with Foreign Investment which on Tier 3 has the consequence of being able to invest in any member country.

No matter how you got the Investment Rights, you and also your Pops will be able to invest in the target country. Private investment does consider foreign states as potential targets for their expansions, allowing them to build profitable buildings more easily.

As nice as it is that Prussia has invested in new buildings in Bavaria, I don’t think we can let them get away with diverting the profits to Berlin instead of our own population!

Nationalization​

Nationalization allows you to take control of foreign assets in your country. You cannot nationalize other countries’ assets as long as they possess Foreign Investment rights in your country.

Once that is no longer the case, e.g. if Bavaria left the Zollverein Power Bloc, you can peacefully nationalize their building levels in your country. For that you need to pay a sum of money from your treasury. Similarly to Privatization, the sum is determined by the construction cost + modifiers from laws.

You will also be able to nationalize your own Pops’ building levels, both worker-owned and privately owned, if you’d like to take ownership. Nationalization is not seen positively by the affected Pops of course and will radicalize them.

“We should compensate them to reduce the quarrels.”
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But what if the Bavarian coffers are empty yet you still want to take over that juicy productive Furniture Manufacturies that is owned by Prussia?

Well, there is always an alternative.

“Pay them? I don’t think so!”
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You can demand nationalization of a country’s assets in your country. If they accept, their building levels’ ownership changes to your country. If they don’t, you can try and enforce it as a wargoal. If you are successful, you will also remove their Foreign Investment Rights for your country in addition to taking control of their buildings in your country.

Building Registry​

To visualize all these new mechanics, we are introducing the Building Registry, which allows you a customizable look at your country’s situation.

All the building data one could wish for
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This is a major new UI, that similar to the Census Data window, comes with a lot of functionality to filter the available data. Only show buildings outside your country? Sure. See all buildings that are owned by Pops and which are currently not hiring but not fully employed? No problem.

Lots of filter groups to browse through
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We hope you find this as useful as we do. You can access it via the button on the bottom of the Buildings panel.

Really recommend pressing that button
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Implications for the Directly Controlled Investment Pool Game Rule​

As you can imagine, this new system of ownership, geographic wealth extraction, and privatization/nationalization has far-reaching implications on the economic foundations of Victoria 3. It enables a lot of interesting dynamics we haven't been able to model until this time and adds a whole new dimension to your economic laws.

It also comes with the consequence of making the Directly Controlled Investment Pool game rule that we introduced with 1.2 (as a legacy alternative to the new Autonomous Investment system) impossible to maintain. In 1.6 and prior, if this game rule was turned on, the player would be directing all construction efforts. As long as there was money in the investment pool and the construction queue was building a privately-owned building, the cost of construction goods would be coming out of the investment pool first before being carried by the state budget. With the new rules for building ownership, investment rights, and so on in 1.7 this no longer makes sense - there's now a very clear distinction between a building project initiated by a private investor and the state, a potential source of conflict innate to both foreign ownership and the privatization/nationalization mechanics, and even differences between owners in different regions that cannot be represented if all construction projects were player-initiated.

Because of this it no longer makes sense for players to be in charge of both public and private investments simultaneously, and as such the Directly Controlled Investment Pool rule has had to be removed for 1.7 and beyond. While we can't support non-default game rules to the same degree as the standard options, removing a game rule completely is not something we'd ever do without good cause. We know that a smaller fraction of you favored this setting so we want to be clear with why its removal was a necessity to move forward with these improvements to ownership and foreign expansion.

Outlook​

I would like to end today’s Dev Diary by providing a short outlook for what these changes also enable us to do in the future.

The main thing here is affecting Companies.

The way we have reworked ownership allows us to create Company headquarter buildings which can then own specific building levels of industries they care about, determining its profitability from and providing their throughput bonuses only to these. While we cannot provide a concrete timeline for that change at this point, it is something we would like to tackle for one of our next free updates.

That’s it for today. Check back next week when Mikael is going to walk you through what changes 1.7 and Sphere of Influence brings to relations and interactions between Overlords and Subjects, including how these foreign investment mechanics relate to your grip over your extended empire.

Overview for all upcoming Dev Diaries:
Date Topic
4th AprilSubject Interactions
11th AprilLobbies and More on Power Blocs
18th AprilThe Great Game
25th AprilThe Art of Sphere of Influence
2nd MayChangelog 1.7
 
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If Aristocrats are going to be buying up non-farm/plantation buildings, are there any plans to allow them to join the Industrialists? Especially with commercialized agriculture, that seems like the logical IG for less socially reactionary/more greedy Aristocrat pops to move towards.
 
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Two questions:

1) Since the player always controls a building's PMs, what stops them from selecting bad PMs for foreign owned buildings and good ones for their own? Obviously you could only do this if the buildings were in different states, but if all the foreign owned buildings were in one or two states, you could change the PMs to make them less profitable, which would then also make your own buildings more profitable (since the foreign owned buildings are now producing less goods, decreasing supply). You could also do this with government owned and pop owned buildings, favoring the government owned ones to make them more profitable.

2) Can one level of a building like the Manor House or Financial District own multiple levels of other buildings? Or do they always have to increase their level as they own new levels? I understand that's how it works in vanilla, but could this be modded so that one level can own a ton of other building levels, making the small number of pops in that one level of Manor House extremely wealthy?
1) The player does not always control it. It is the country where the building is located that sets the PM. So not sabotaging that way.

2) They have to increase their level pretty much. An exception being subsistence farms where we look at the employment rather than the amount of levels. I don't think you'll be able to mod that. What you can mod though are the PMs, so you could reduce the number of Pops that "work" in these buildings and you'll create a very rich upper class.
 
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Something I'm curious about are construction sectors, will the state continue to pay all construction worker wages (even if they just sit around and do nothing)?

Right now even if your private queue "pays" for construction it means it is only paying for construction goods, construction workers are counted as government workers and the government always has to pay their wages. Maybe this is something that can be looked at? I would like it to work a bit like conscription and some/all workers get layed off when there is no/not enough construction being done plus private investments should not be built by government construction workers.
I asked this question earlier in the thread, not sure if it got missed or if you'll need to look into it first but judging from the amount of reactions the question got others seem to be curious about the topic too (sorry for bumping but this is something that has bugged me for a long time)
 
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Here’s hoping that “at this point” is carrying a lot of weight there!

And on point 3, I’m not sure I understand the answer.
So, suppose the UK invests in Japan and builds a steel mill. Its owned by some owner in the UK. Is there any way for Japanese owners to buy that mill, aside from the Japanese state nationalizing it and then privatizing it?
If the owner of the steel mill is a country, let's say GB, they can privatize that steel mill. Then japanese pops can buy that steel mill, yes.
As I mentioned, there's no transfer of ownership between two private pop investors (at least with release of SoI).
 
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If Aristocrats are going to be buying up non-farm/plantation buildings, are there any plans to allow them to join the Industrialists? Especially with commercialized agriculture, that seems like the logical IG for less socially reactionary/more greedy Aristocrat pops to move towards.
they alredy do join the industrilist IG tough at a much reduced rate, it get more apperent if yuo surpress the landowner IG and yuo see that many will just join the industrialists.
 
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2) Can one level of a building like the Manor House or Financial District own multiple levels of other buildings? Or do they always have to increase their level as they own new levels? I understand that's how it works in vanilla, but could this be modded so that one level can own a ton of other building levels, making the small number of pops in that one level of Manor House extremely wealthy?
If it hasn't changed in this new system, I believe you could make it so that the number of workers don't scale with the building level.
 
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Investment pool can stay or can go, I can't care less as I have never used it, but I really hate that now any pop can build any building in any state without a licence and mess with the approved distribution of industries. Definitely will mod this nonsense out.
 
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This would be interesting to me too, also makes me wonder how much Urbanization you roughly get from Manor Houses/Financial Districts? Is it comparable to the industry buildings we currently have?
We have set it to 0 as it was creating a lot of issues, since it would score urbanization twice effectively, once for the industry building, then again for the owning building.
 
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The building is put up for sale immediately on construction and counts as state-owned until it is purchased. So you'll have some buildings temporarily managed by the state until an investor snaps them up.

I am not sure i like th is. I understand it. But if feels weird, gamey and unrealistic. You have basically gone back to the Vicky 2 system which is much better, why not fully? The state should not be able to build any private industries under laissez fair. Thats part of the cool stuff about the simulation. Your play style also matching the laws. If you want to control some of the buildings go interventionists. If you want a super efficient economy, go to Laissez Fair but you wont be able to build. Etc
 
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My main thoughts when reading this DD are the following: (which i'm not sure if they were answered)

What kind of effect does foreign investment have over the relationship of the 2 nations? Does the investor gain political influence over the country it invests in? For example I as the investor make a 'frendly' suggestion that the country I invest in should ban slavery. IRL politicians would probably think hard if they want to lose an investor over a specific matter or not.

My second thought is that foreign investors should not only be able to build stuff but to purchase already existing buildings. This would greatly expand the amount of things you can do with money.
 
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I still do not understand how foreign investment works construction wise. If Prussia invests in a Bavarian Furniture Factory, does it go into a Prussian government building queue, Prussian private queue, or Bavarian private queue? Sometimes I just want another country to get levels of mines or plantations, so that I can import the resource, and don't really care about then getting the profits, so it's mostly just important to me - how fast can I build things in different countries.
The building country gets the entry in their construction queue, independent of where in the world the building is being constructed.
 
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We have set it to 0 as it was creating a lot of issues, since it would score urbanization twice effectively, once for the industry building, then again for the owning building.
I feel like this will cause a services/transport shortage in states with a high concentration of ownership buildings.

Wouldn't it have been better to split the urbanization in some kind of ratio, say half and half, or 1/3-2/3?
 
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Will there be any quality of life features to make it easier to nationalise/privatize at scale? For example, I imagine if I'm a GP and I conquer a new territory, it might be preferable for me to nationalize everything in the newly conquered province and then privatize it. Or i might want to Nationalise all the Oil in my country etc. etc.
A group nationalization button is on our list.
I cannot promise that it will be there for release. If it's not, it will likely be in a post-release patch not too long after.
 
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they alredy do join the industrilist IG tough at a much reduced rate, it get more apperent if yuo surpress the landowner IG and yuo see that many will just join the industrialists.
Not according to the wiki.. I will test it tonight. Could you post a screen shot id be interested to know this.
I suspect what you are seeing when you suppress the landowners is actually a relative increase rather than a total. Ie there is only 100% clout so if you suppress the landowners the relative clout of the industrialist rises
 
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I asked this question earlier in the thread, not sure if it got missed or if you'll need to look into it first but judging from the amount of reactions the question got others seem to be curious about the topic too (sorry for bumping but this is something that has bugged me for a long time)
No plans to change it at this point I'm afraid.
 
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I feel like this will cause a services/transport shortage in states with a high concentration of ownership buildings.

Wouldn't it have been better to split the urbanization in some kind of ratio, say half and half, or 1/3-2/3?
Maybe, yeah.
I'll investigate in more detail if I find the time.
 
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Not according to the wiki.. I will test it tonight. Could you post a screen shot id be interested to know this.
I suspect what you are seeing when you suppress the landowners is actually a relative increase rather than a total. Ie there is only 100% clout so if you suppress the landowners the relative clout of the industrialist rises
ah crap, sorry it was a mod, sorry for the mix up
 
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