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A concession agreement is a negotiated contract allowing a company to do business under specific conditions. It has two main interpretations: first, it describes a contract between a foreign company and a government, permitting the company to operate in the country. Second, it grants a concessionaire exclusive rights to conduct business in a specific area or venue in exchange for negotiated terms. Governments may incentivize foreign companies through tax reductions and relaxed restrictions. Conversely, if a government is less cooperative, the company might need to make certain concessions to secure the agreement.
