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Foreign profit sharing serves as a strategic tool for business owners to reduce taxes and enhance savings, particularly within a retirement plan context. There are three primary types of contributions an employer can make: matching contributions, safe harbor contributions, and profit sharing contributions. Profit sharing, which allows for contributions up to $64,500 annually, is both tax-deductible and grows tax-deferred. This flexibility makes it advantageous, as business owners can determine their contribution amounts year to year. Additionally, profit sharing includes a six-year vesting schedule, providing further appeal to business owners.