What is Foreign
Foreign is a term used to mean any non-domestic entity or financial activity that takes place in another country.
BREAKING DOWN Foreign
Foreign can be used in a variety of contexts, both financial and in more of a general sense.
From a financial and economics perspective, the term is often used to refer to a non-U.S. company with securities trading on the North American market. In a more general interpretation, it can also mean any corporation organized under the laws of another country.
When used to refer to economic organizations or activities that occur outside of the U.S. or wherever an individual or company’s home country happens to be, foreign activity can often lead to the consideration of issues involving international economics. This refers to the impact and implications that international trade and finance can have on a larger global spectrum. Nations such as the United States with major economies and significant trade and financial interactions worldwide can have significant impact on many aspects of international economics.
Foreign in a Financial Context
The term “foreign” can be applied to a broad range of meanings and usages. From an American's perspective, foreign means pretty much everything outside the United States.
In an economic context, foreign markets refer to any market outside of a company’s or investor’s home country. Trading via a foreign market can be challenging, as it frequently involves communicating in a different language and mastering another country’s financial and investment systems.
Another financial concept involving the “foreign” term is the foreign exchange market, also known as forex or the currency market. This involves the buying and selling of currencies, and is considered to be the world’s largest financial market. Many investors find the forex market to be highly exciting and potentially lucrative.
Sometimes what the average layperson would think of as foreign corporations are called alien corporations. This is a term that is primarily used in the United States to refer to companies based outside of the U.S. This is not to be confused with the business industry usage of the notion of a foreign corporation, which is a term commonly used to mean a company that is registered to do business in a different state or financial jurisdiction than where it was original established. This business will often need to obtain certain permits or license, or complete an assortment of required documentation and paperwork, in order to get permission to conduct business in this other state or jurisdiction.