Mate, you really should go for the first one, its better , and kind of more memorable , my advice go for first.
Well a simple way is to go to the Google Keywords toolm do a search for the keyword you are trying to target and the country, once you find out the keywords you want, write articles with those keywords, and submit to article directories based in those countries (again a Google search with the results based in that country will find you those article directories)
This is a classic question here in DP and other seo forums. Your question is which is better a subdomain or a subfolder and the answer is undetermined because they both have their own capabilities to rank it always depends on your content and the quality of backlinks that you have.