Sometimes a country's laws forbid foreigners from owning a business in the nation. In the presence of such laws, a(n) ________ is one way for an American company to have a presence in that foreign country.
A) export agreement
B) MBO pact
C) import agreement
D) 50/50 ownership split
E) joint venture

Question

Quizplus · Accepted Answer

A U.S. firm may form a joint venture, also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country. Sometimes a joint venture is the only way an American company can have a presence in a certain country, whose laws may forbid foreigners from owning a business there. Indeed, in China all foreign cars are sold through joint ventures with Chinese companies.

Sometimes a Country's Laws Forbid Foreigners from Owning a Business