N.D.P.16).

Indirect Investment Options

The indirect investment option avails itself of two avenues: licensing agreements or branch or representative offices. "Foreign companies with patents, trademarks, or other intellectual property are free to enter into licensing agreements with local companies. Licensing has the advantage of limiting a foreign company's exposure, since the company need not set up an office or a joint venture" (Price Waterhouse Coopers. N.D.P.18). The branch or representative office "remains part of the parent company and is therefore not entitled to the rights and protections accorded to Chinese legal entities; however, it also must appoint a Chinese legal representative" (Price Waterhouse Coopers. N.D.P.18).

Pros and Cons of Direct v. Indirect

Of the direct and indirect investment options there are positives and negatives. The direct investment option allows the foreign entity to immerse themselves into the political, regulatory, and business framework of China's economic powerhouse. One of the most...
[ View Full Essay]