Foreign Subsidiaries

Foreign subsidiaries are companies that are owned or controlled by a parent company based in another country. They operate in their local markets but follow the guidelines set by the parent company. For instance, a U.S. firm might own a factory in Brazil to produce goods for South American customers. This arrangement allows parent companies to expand their reach, tap into new markets, and benefit from local resources while managing risks associated with international business. Foreign subsidiaries can enhance a company’s competitive advantage and drive growth beyond domestic borders.