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7 November, 22:41

How can a wholly owned subsidiary be established in a foreign market?

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  1. 8 November, 02:04
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    There are generally two different ways a company can establish a wholly owned subsidiary in a foreign market. First, it could purchase an already established company in the country they wish to access, and use them as an appropriate conduit. However, this method can be problematic, as you will need to smooth out differences in corporate culture, and be wary of unknown surprises you are potentially acquiring - buying a failing company could make their problems yours. On the other hand, you have suddenly removed a competitor from your market, acquired whatever political connections and licenses they have, and gain instant expertise and clients. Alternatively, a firm can set up what is known as a "greenfield venture", which is an entirely new operation in the country in question. Though it requires more time, effort and capital, establishing the company from the ground up gives much greater control and flexibility in how the company will operate from day one.
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