Wholly Owned Subsidiaries
To keep full control over their overseas business, this entry mode of international business is preferred by firms. The parent company makes 100 percent investment in its equity capital and thereby takes full control over the overseas firm.
A wholly owned subsidiary in a foreign market can be established in either of the two ways:
- Establishing a new company totally to start operations abroad - also referred to as a green field venture, or
- Obtaining an already set up company in the foreign country and using that company to produce and/or promote its products in the host country.