A foreign subsidiary is a company that is controlled by a parent company based in another country. This subsidiary operates independently but is still linked to the parent company, which usually owns a majority of its shares. Foreign subsidiaries allow companies to expand their operations and reach new markets while benefiting from local knowledge and resources. These subsidiaries can help businesses reduce costs, access new customers, and navigate local regulations more effectively. By establishing a presence in different countries, companies can diversify their operations and minimize risks associated with economic fluctuations in their home markets.