In the world of finance, there exists a valuable tool known as licensing. This is a contractual agreement where a company's patents, trademarks, copyrights, or know-how are made available to another party in exchange for predetermined compensation. This can come in the form of a one-time payment or an ongoing royalty based on production volume. The benefits of licensing are numerous, including the ability to enter foreign markets efficiently and with less risk compared to establishing a physical presence. Additionally, licensing allows for the circumvention of trade barriers, both tariff and non-tariff, creating a more accessible global market.
