Question

What are the tax advantages of operating in the foreign jurisdiction through a separately incorporated foreign subsidiary?

Answer 1

A subsidiary is a separate legal entity from the parent, although owned by the parent corporation.  Usually, the subsidiary is wholly-owned by the parent corporation. There is no requirement in the U.S. to have a local director. The tax advantages of operating in the foreign jurisdiction through a separately incorporated foreign Subsidiary are as follows:

-Taxation of the subsidiary is on the subsidiary's income alone,

-When properly structured and operated, the liabilities of the subsidiary are not attributable to the parent corporation.