The main advantage in establishing a foreign subsidiary as opposed to a branch office is:

Question

Quizplus · Accepted Answer

Establishing a foreign subsidiary provides limited liability protection to the parent company, meaning that the parent company's assets are not at risk in case the foreign subsidiary faces legal or financial troubles. On the other hand, a branch office would not provide such protections, thereby exposing the parent company's assets to risk. While transfer pricing, reduced disclosure, and reduction in host country regulations could be advantages of establishing a foreign subsidiary, none of these options provide the same level of protection as limited liability.

The Main Advantage in Establishing a Foreign Subsidiary as Opposed