What type of business entity describes a company that is mostly owned by a parent company in another country?

A foreign subsidiary is a business entity that is established and operates in a different country from its parent company, with a significant degree of ownership held by that parent company. This structure allows the parent company to maintain control over the operations and strategy of the subsidiary while benefiting from the advantages of operating within a foreign market.

Foreign subsidiaries are typically created to penetrate new markets, reduce operational costs, or take advantage of specific economic conditions, such as tax incentives or lower labor costs. They function as independent entities legally but remain financially tied to the parent company, which holds a majority stake.

On the other hand, the other options refer to different types of business arrangements. A multinational corporation operates in multiple countries and does not necessarily imply that it is heavily owned by another entity. A franchise is a business model that allows individuals to operate a business using the branding of a larger company but does not imply ownership by a parent company in another country. A joint venture involves two or more parties creating a new entity, sharing control and resources, rather than being owned predominantly by a parent company. These distinctions clarify why "foreign subsidiary" is the correct term for a company primarily owned by a parent company in another country.