The effects on employment associated with FDI are both direct and indirect. In countries where capital is relatively scarce but labor is abundant, the creation of employment opportunities – either directly or indirectly – has been one of the most prominent impacts of FDI. The direct effect arises when a foreign MNE employs a number of host country citizens. Whereas, the indirect effect arises when jobs are created in local suppliers as a result of the investment and when jobs are created because of increased local spending by employees of the MNE. In order to illustrate the employment effects in host country we will use the example of Toyota’s investment in France. Based on a data published (Hill, 2000) this investment created 2000 direct jobs and conceivably another 2000 jobs in supporting industries. The domestic private sector can benefit by entering into business relationships supplying inputs to these new market entrants (backward linkages) or processing a foreign investor’s products (forward linkages).