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Sidolowka

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Is it better to Hold the Malaysian islands as yourself as a trade company or make a vassal there and have them hold it for your and transfer the trade power?
Always hold the important trade centres in trade companies directly, while either giving the rest to your vassals or keeping them in TC's too depending on the situation. This is because TC's boost the goods produced in non-TC provinces by 50% of the provincial trade power it holds in a node. Hence in high value nodes you want to keep vassals while in low value ones the diplo slot is probably not worth it.

In Malacca's case let's say you hold Brunei, Lamuri, Melaka, Palembang, Pasai, Pattani and Siak in trade companies directly, while the rest of the Malacca node is held by your vassal Kutai. Since your trade company holds all 8 of the trade centres in Malacca it should have upwards of 80% of the provincial trade power in the node, meaning Kutai will recieve a +40% goods produced bonus to all of its provinces, I.E. every single province in the node bar the 8 trade centres. Assuming you have decent control of the nodes downstream from Malacca, this means you almost directly benefit in +40% goods produced in the node. Since Malacca is an extremely rich node that can easily exceed 50 ducats mid-game, the 1 diplo slot used is very much worth it.

However in nodes like Tibet or Yumen, holding a vassal probably isn't worth it considering how the trade goods there are mostly livestock and wool, meaning that the fiscal benefits from the +40% goods produced isn't going to outweigh the -1 diplo slot.
 
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Battlex

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Always hold the important trade centres in trade companies directly, while either giving the rest to your vassals or keeping them in TC's too depending on the situation. This is because TC's boost the goods produced in non-TC provinces by 50% of the provincial trade power it holds in a node. Hence in high value nodes you want to keep vassals while in low value ones the diplo slot is probably not worth it.

In Malacca's case let's say you hold Brunei, Lamuri, Melaka, Palembang, Pasai, Pattani and Siak in trade companies directly, while the rest of the Malacca node is held by your vassal Kutai. Since your trade company holds all 8 of the trade centres in Malacca it should have upwards of 80% of the provincial trade power in the node, meaning Kutai will recieve a +40% goods produced bonus to all of its provinces, I.E. every single province in the node bar the 8 trade centres. Assuming you have decent control of the nodes downstream from Malacca, this means you almost directly benefit in +40% goods produced in the node. Since Malacca is an extremely rich node that can easily exceed 50 ducats mid-game, the 1 diplo slot used is very much worth it.

However in nodes like Tibet or Yumen, holding a vassal probably isn't worth it considering how the trade goods there are mostly livestock and wool, meaning that the fiscal benefits from the +40% goods produced isn't going to outweigh the -1 diplo slot.
Won't the goods produced in non trade company provinces you own be boosted and so you don't need to rely on native vassals?
 

Sidolowka

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Won't the goods produced in non trade company provinces you own be boosted and so you don't need to rely on native vassals?
Yes that's true, but you'd also suffer from both religious and cultural intolerance (-30% Goods produced and +5.75 unrest), which basically cancels out the extra goods produced, while also increasing the local unrest significantly.

Even if you had max tolerance of heathens/heretics, or if you were colonising Malacca as Hungary/Rothenburg/Texas for some reason, you'd still have to culture convert the provinces to fully remove unrest, while also taking a huge hit to your governing capacity. Keeping high dev nodes like Malacca with vassals is most likely preferable.
 
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RAID186

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Always hold the important trade centres in trade companies directly, while either giving the rest to your vassals or keeping them in TC's too depending on the situation. This is because TC's boost the goods produced in non-TC provinces by 50% of the provincial trade power it holds in a node. Hence in high value nodes you want to keep vassals while in low value ones the diplo slot is probably not worth it.

In Malacca's case let's say you hold Brunei, Lamuri, Melaka, Palembang, Pasai, Pattani and Siak in trade companies directly, while the rest of the Malacca node is held by your vassal Kutai. Since your trade company holds all 8 of the trade centres in Malacca it should have upwards of 80% of the provincial trade power in the node, meaning Kutai will recieve a +40% goods produced bonus to all of its provinces, I.E. every single province in the node bar the 8 trade centres. Assuming you have decent control of the nodes downstream from Malacca, this means you almost directly benefit in +40% goods produced in the node. Since Malacca is an extremely rich node that can easily exceed 50 ducats mid-game, the 1 diplo slot used is very much worth it.

However in nodes like Tibet or Yumen, holding a vassal probably isn't worth it considering how the trade goods there are mostly livestock and wool, meaning that the fiscal benefits from the +40% goods produced isn't going to outweigh the -1 diplo slot.

That's not the best way to make money off a TC(exactly, but it is good), I'll be posting how once my cousin and I finish this 3-4 million income run. You're about halfway there though. 5 ducats is nothing, and you'll be getting a LOT more than 40% Goods Produced, it can go up to around 120% per our estimate, and applied to 90% of the provinces in the trade node, no vassal needed.