A contract is equivalent to a contract, but only physical objects have contracts, such as house deeds, land deeds, etc. The contract model is that everything must be in writing, and there is written evidence, and no regrets are allowed.
The contract entry mode is that the enterprise enters the target country market by entering into a long-term, non-investment intangible assets transfer cooperation contract with enterprises in the target market country.
The difference from the export entry mode is that under the contract entry mode, enterprises export intangible assets such as technology, skills and craftsmanship, not just tangible products. Therefore, they can overcome commodity trade barriers and overcome transportation costs. The problem of excessively high prices making certain export products uncompetitive in the international market.
Extended information:
The contract model has the following forms:
1. License operation
License operation refers to the enterprise (Licensor) signs a contract with the host country enterprise (licensee), allowing the host country enterprise to use its patent, trademark, company name or other intangible assets within a certain period of time, and receive royalties or other compensation.
2. Franchise operation
License operation means that an enterprise (licensor) signs a contract with an enterprise in the host country (licensee) to allow the enterprise in the host country to use its patents, trademark, company name or other intangible assets and receive royalties or other compensation.
3. Contract manufacturing
Contract manufacturing refers to a market in which an enterprise enters into a contract with a foreign manufacturer, and the foreign manufacturer manufactures the agreed products in accordance with the requirements of the contract, while the enterprise itself is responsible for the market sales. Ways of entry.