Global Business & Economic Concepts Explained
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Setting Up a Multinational Branch
When establishing a branch of a multinational company, several critical factors are considered:
- Cheap Labor: Access to affordable labor can significantly reduce operational costs.
- Low Transportation Costs: Proximity to markets or raw materials can minimize logistics expenses.
- Cheaper Industrial Land: Lower land acquisition or rental costs for industrial facilities.
- Fiscal Benefits: Favorable tax policies, subsidies, or incentives offered by the host country.
- Lower Production Costs: Overall reduction in expenses related to manufacturing or service delivery.
- Favorable Political Circumstances: A stable political environment and supportive government policies.
- Lower Tax on the Activity: Reduced tax burden on the specific