When choosing to establish a foreign branch or subsidiary,a prime factor in the U.S.company's decision is:

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Both the tax rates applicable to different forms of organizations and whether the foreign taxes are creditable taxes for U.S. purposes are prime factors in a U.S. company's decision to establish a foreign branch or subsidiary. The tax rates applicable to different organizational forms will impact the overall cost of doing business and potential profitability, while the ability to credit foreign taxes against U.S. taxes can impact the effective tax rate on a global level. The investment tax credit given by the foreign country may also play a role, but it is not typically a primary factor in the decision-making process.

When Choosing to Establish a Foreign Branch or Subsidiary,a Prime