A fronting loan would most likely be utilized by an MNE attempting to ________.

Question

Quizplus · Accepted Answer

Fronting loans are a type of loan used by multinational enterprises (MNEs) to minimize taxes. Essentially, a fronting loan is a loan that is extended by a bank or other financial institution in a low-tax country to an MNE subsidiary in a high-tax country. By doing this, the MNE can shift profits to the low-tax country and reduce their overall tax burden. This practice has come under increased scrutiny in recent years as governments seek to crack down on tax avoidance.

A Fronting Loan Would Most Likely Be Utilized by an MNE