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While simply taking over a region is often more profitable than making the region a protectorate, in some circumstances the trade revenue and tribute paid by the protectorate is greater than the taxed wealth of a region.
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It usually also demands a huge amount of money in return, though, so it is usually a good idea to ignore this proposition unless the invading faction is spread thin militarily. When a minor nation has suffered great military defeats and/or lost a considerable amount of land, it may offer to become a protectorate rather than face complete destruction. This makes protectorates much more reliable allies than regular allies. The A.I of Empire: Total War are much more reluctant to break a protectorate agreement than an alliance protectorates are forced to join a war if they are required by their protecting faction, unlike allies. For example, Poland-Lithuania begins the grand campaign with Saxony and Courland as its protectorates if Poland-Lithuania becomes a protectorate of Prussia, Saxony and Courland automatically become Prussian protectorates. If a nation that has protectorates becomes a protectorate, its own protectorates will become protectorates of the new parent nation. At the beginning of a campaign, some minor nations are already protectorates of others. The richer a nation is, the more practical it is to make it a protectorate. They also have friendlier relations with their protector faction thanks to their status as an ally. Protectorates also automatically grant indefinite military access to their protector faction. Protectorates cede some of their income to their protector nations, in exchange for a pledge from the protector faction to ally itself with it and declare war on enemies invading the protectorate and vice versa. All protectorates are counted as allies, and function in a largely similar way with a few key differences. Any faction, regardless of if they are major or minor, may become protectorates if these conditions are met. Factions may only request other factions to be protectorates if the requested faction has only one region left.
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No faction can be the protectorate of more than one faction at a time. However, should the nations be at war, then one nation becoming another's protectorate can be part of the terms of a negotiated peace. Under normal circumstances, a faction cannot ask another faction which is already a protectorate to become a protectorate. Players may choose to request other nations to become their protectorate in the diplomacy screen. A protectorate is a faction under the protection of another faction.
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Protectorates are a gameplay mechanic in the Total War series.
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