An absentee business owner is a business owner who does not personally manage the business or does not live in the
community
A community is a social unit (a group of people) with a shared socially-significant characteristic, such as place, set of norms, culture, religion, values, customs, or identity. Communities may share a sense of place situated in a given g ...
in which the business operates, but owns it.
Research
Studies show that money spent locally circulates back into the community three times as much when it is not spent with an absentee-owned business.
Local currency has been implemented in some communities as a countermeasure to this effect. Neighborhood investment, in which members of the community are given opportunities to become partial owners of new developments, is another method.
In
Brazil
Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
, studies found that more than a third of the profits generated from
tourism
Tourism is travel for pleasure, and the Commerce, commercial activity of providing and supporting such travel. World Tourism Organization, UN Tourism defines tourism more generally, in terms which go "beyond the common perception of tourism as ...
were exported to absentee business owners. In
Vietnam
Vietnam, officially the Socialist Republic of Vietnam (SRV), is a country at the eastern edge of mainland Southeast Asia, with an area of about and a population of over 100 million, making it the world's List of countries and depende ...
, the economic expansion of the 1990s was associated with a rise in absentee business owners. There has also been concern that tourism profits in
Southern Africa
Southern Africa is the southernmost region of Africa. No definition is agreed upon, but some groupings include the United Nations geoscheme for Africa, United Nations geoscheme, the intergovernmental Southern African Development Community, and ...
go to absentee business owners.
Risks
Absentee business owners can be more vulnerable to theft by employees, especially when record keeping is turned over to employees, unless proper
internal controls and review are implemented. In the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, many business-owning military
reservists have become absentee business owners during long tours of duty in Iraq and Afghanistan.
See also
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Successor company A successor company takes the business (products and services) of a previous company or companies, with the goal to maintain the continuity of the business. To this end, the employees, board of directors, location, equipment, and even product name m ...
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Absentee landlord
References
{{Reflist
External links
Business Setup in UAE
Business ownership