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Political and Legal Environments of Target Country

Select a target country for establishing a foreign subsidiary:

A. Develop a political index for the target country.

Explain why you selected this country.

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The various considerations that have to be kept in mind before setting up a subsidiary in another country are:

1) The type of political and legal systems of the country;
2) Is the legal system effective and impartial;
3) Does it have the potentiality for growth and expansion of the market;
4) State of Economic growth;
5) Political stability;
6) Licensing policy and
7) Ease of formation or setting up of the subsidiary.

These will be the basic criterion for our study for setting up a subsidiary of a company. In an international business the ways of entering in the market are important issues. Whether the host country offers opportunities of exports, grants the licenses easily without much waste of time, ease in setting up of joint ventures, infrastructures, trade barriers, logistic facilities, industrial policies.

Above all we have to see the Economic and Political situation. These days one more important factor has cropped up and that is the state of terrorist attacks. Of Course there is no country in the world today which is not exposed to this danger. Political strife may be a deterrent for entering in the country.

International business depends on the benefits of costs, returns on the investment, risks involved and above all potential of growth.

Other factors influencing the decision to go to ...

Solution Summary

The solution discusses political and legal environments of target country for establishing a foreign subsidiary.