This debate is simply that of liberalizing or controlling a nation's capital account. There are benefits to both.
The benefit of liberalization (i.e. no limits on foreign investment) is that it can provide "a higher rate of return on people’s savings in industrial countries by increasing growth, employment opportunities, and living standards in developing countries." [1]
The benefit of controlling (i.e. limit foreign investment) is that it can reduce market volatility and risk. "International investors are willing to lend to them in good times but tend to pull back in bad times, thereby amplifying swings in the domestic macroeconomy." [1]
A free market is one where two or more parties are free to exchange goods and services voluntarily, thereby determining prices through the forces of supply and demand. The nature of these transactions must be voluntary in order for it to be considered free market exchange.
So, in my view, your question the following: is there a time when two or more parties wish to voluntarily exchange goods or services, but given the circumstances of the exchange, government has a duty to forcibly intervene, thereby preventing the exchange?
Many are tempted to point to fraud, pollution, or other unjust conduct as evidence that the free market does not work. However, each of the examples that one could give would involve an exchange where one or more parties did not voluntarily engage in that exchange, and therefore, the injured party would have a right to seek damages from the offending party. In a free market, I am no more justified in destroying your garden or selling you snake oil as a cure for cancer than I am in any other market system.
Therefore, I maintain that there exists no exchange that warrants government intervention given that all parties involved engage in the exchange voluntarily. We should conclude that the free market is good for the public and that it is the only market system that equally and evenly respects the rights and autonomy of all members of society. To that point, I conjecture that it is immoral to forcibly intervene in such an exchange since doing so would obstruct the autonomy of two or more moral agents, which I believe to be supported by Immanuel Kant's Categorical Imperative.
Forgive me if this seems brash, but in my opinion, you've got to treat this like courting a love interest. It's a bad idea to constantly check your texts to see if they have read the latest unanswered one. It shows insecurity and that you're willing to wait around for them to call the next shot.
You'll be a happier, more effective negotiator if you treat it like, "I'm going to go start this great company; if they want to be apart of it, I'd love to join YC, but I'm going to make it happen with or without them."
I'm building an inexpensive, autonomous robot that take cares of your laundry. While you're at work, it will wash your clothes, fold them, and put them away.
When you lack vision, you ask yourself, "How do I do great business?", which is a question that never leads to the actual answer. It does, however, lead you to hire people who are trained in the art of doing "great business": MBAs.
The benefit of liberalization (i.e. no limits on foreign investment) is that it can provide "a higher rate of return on people’s savings in industrial countries by increasing growth, employment opportunities, and living standards in developing countries." [1]
The benefit of controlling (i.e. limit foreign investment) is that it can reduce market volatility and risk. "International investors are willing to lend to them in good times but tend to pull back in bad times, thereby amplifying swings in the domestic macroeconomy." [1]
[1] - http://www.imf.org/external/pubs/ft/fandd/basics/capital.htm