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A concession agreement refers to a negotiated contract allowing a company to conduct business under specific conditions. It typically has two definitions: first, it is an agreement between a foreign company and a government, enabling the company to operate within that country's jurisdiction; second, it grants the concessionaire exclusive rights to do business in a specific area or venue under negotiated terms. In these contracts, governments may incentivize companies by offering reduced taxes or relaxed regulations. Conversely, if a government is less favorable, the company may need to make concessions, such as adjusting its operational practices.
