How Is a Foreign Subsidiary Different from a Foreign Branch

question 22

Multiple Choice

How is a foreign subsidiary different from a foreign branch of a domestic corporation?

• A) Subsidiaries always generate more foreign source income than branches do.
• B) The subsidiary is a company incorporated in the foreign country, whereas a branch is not a separate corporation.
• C) A subsidiary is created to manufacture and distribute products in foreign markets, whereas a branch's only function is sales in the foreign market.
• D) The income of a subsidiary is taxable by the country where it is located, but branch income is not subject to tax by the country where it does business.

---

Definitions:

Legal Proceedings

The process of taking legal action in a court of law, including all activities from the filing of a lawsuit to the resolution of the case.

Suspected Abuse

Situations in which someone believes that a person, often a child or vulnerable adult, is being harmed or mistreated.

Mandated Law

A law that is officially required or enforced by a governing body, often with specified penalties for noncompliance.

Schools Fire

Incidents of fire occurring within educational institutions, prompting concerns for safety and emergency preparedness.