What is the concession agreement?

The term “concession agreement” is used in the trade world in two slightly different ways. Both apply to the type of contracts that gives the company the right to do business with certain specific requirements. In one sense, it concerns a contract between a foreign company and a government in which the company signs a concession agreement in order to do business in the country of government. In the second sense, the concession agreement is an agreement that grants the concessionaire the exclusive right to do business in a particular area or instead of in exchange for some carefully negotiated conditions. The government may want to motivate society by reducing taxes, releasing restrictions or providing other incentives. In cases where the government is not so excited, the company may need it to do some concessions, such as the assignment of some profits to the government or paying a special tax rate, which may be higher than that of domestic businesses. Once the concession contract is agreed and signed, the Company has the right to do business locally according to the terms of the agreement.

Governments can use this type of concession contracts to provide services that cannot or do not provide. For example, a concession contract can be signed with a foreign company that allows it to manage ports or borders.

As far as the operating concession is concerned, the agreement gives the company exclusive right to traffic, such as a sports stadium, cruise ship or government building. In this case, the company operates a concession that can sell food, accessories and a wide range of other products. They have to pay an annual fee for the right to operate or give up the landing of your income to the venue. In exchange for this, the venue agrees with the failure to sign concession contracts with other companies offering similar products or services.

This type of concession contract is often used when a place or company wants to make a product or service available, but does not want to participate directly. For example, on a cruise ship, the line can run concessions with restaurantsand cafes not to be responsible for food services. This means that the cruise ship is deprived of some potential profits, but also about problems such as legal responsibility for stained food, securing staff and organizing supplies.