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What is a Foreign Collaboration Agreement?

A foreign collaboration agreement is a strategic and joint co-operation between resident and non-resident business entities. A foreign collaboration agreement can be between two or more companies and any of them must be a foreign company. It is entered for a common benefit of all and thereby inaugurating the business in another country with or without forming a new company.

Why is it Important?

1. Foreign collaboration agreements allow entities to use resources available in the resident entity's country in an effective way.

2. Foreign collaboration improves the economic outgrowth of the collaborating business entities.

3. It occupies an influential market share for the collaborating entities and reduces the more expensive operating cost of a non-resident entity.

4. It also creates employment options in the resident entity's country.