FOREIGN SUBSIDIARY Meaning and
Definition
-
A foreign subsidiary refers to a company that is controlled and owned by another company, known as the parent company, situated in a different country. This arrangement typically occurs when a parent company decides to expand its business operations into foreign markets and establishes a separate entity in that particular country. The foreign subsidiary operates with its own management and can have its own legal entity.
The establishment of a foreign subsidiary allows the parent company to primarily target and cater to the local market, benefit from the reduced costs of production, access to local resources, and better understand and adapt to the local business environment. The foreign subsidiary is subject to the laws and regulations of the host country, including taxation, employment practices, and trade policies.
The degree of control exerted by the parent company over the foreign subsidiary may vary, ranging from full ownership and control to minority ownership with shared dominance. The parent company often provides financial and managerial support to the foreign subsidiary, including technological know-how, branding, and marketing expertise.
Foreign subsidiaries offer several advantages to the parent company, such as increased revenue and market reach, diversification of operations, and reduced risks associated with currency exchange rates and political instability. Additionally, they can facilitate international trade, strengthen the parent company's global brand presence, and foster cultural exchange and economic growth between countries.
Common Misspellings for FOREIGN SUBSIDIARY
- doreign subsidiary
- coreign subsidiary
- voreign subsidiary
- goreign subsidiary
- toreign subsidiary
- roreign subsidiary
- fireign subsidiary
- fkreign subsidiary
- flreign subsidiary
- fpreign subsidiary
- f0reign subsidiary
- f9reign subsidiary
- foeeign subsidiary
- fodeign subsidiary
- fofeign subsidiary
- foteign subsidiary
- fo5eign subsidiary
- fo4eign subsidiary
- forwign subsidiary
- forsign subsidiary
Etymology of FOREIGN SUBSIDIARY
The word "foreign" is derived from the Old French word "forain" which means "outside, abroad". It originated from the Latin word "foris" meaning "outside".
The word "subsidiary" comes from the Latin word "subsidium", which refers to "aid, help, support". It is formed from the combination of the prefix "sub-" meaning "under" and the verb "sidēre" meaning "to sit". It originally referred to military reinforcements or troops that were positioned or stationed nearby to provide support.
When combined, the phrase "foreign subsidiary" refers to a company or corporation that is located or established outside its home country by another parent company.
Infographic
Add the infographic to your website:
