What Are the 5 Forms of International Business?

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Overview of International Business

International business refers to any business activities conducted across national boundaries. There are five basic activities to internationalizing a business:

  1. Importing & Exporting

    • Imports: a good or service brought into one country from another.
    • Exports: a good or service produced in one country then sold to another.

  2. Licensing

    • Granting permission for a foreign company to produce a company’s product for a fee.

  3. Franchising

    • Similar to licensing but involves greater control over how the end product is produced and sold.

  4. Joint Ventures

    • Two or more companies form a partnership to share knowledge, resources, risks to accomplish a goal.

  5. Direct Foreign Investment

    • A company builds new operations like factories, offices in another country. This requires the greatest commitment of resources but offers the most control.

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