A multinational corporation (MNC) is a business entity that owns and controls the manufacture of products or the provision of services in at least one country other than its original place of incorporation. Control is seen as a critical characteristic of a multinational firm in order to separate it from worldwide portfolio investment companies, such as certain international mutual funds, which invest in foreign corporations only for the purpose of diversifying financial risks. Multinational corporations, according to Black's Law Dictionary, are defined as businesses that generate at least 25% of their income from activities in countries other than their home country. The term "multinational company" may be used to refer to a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation, among other things. There are small, yet significant, variations between these two phrases.
The vast majority of the world's biggest and most prominent firms of the modern era are publicly traded multinational organisations, including those included on the Forbes Global 2000 list. Multinational firms have come under fire for allegedly failing to adhere to ethical norms. They have also been connected with multinational tax havens, as well as with tax avoidance operations such as base erosion and profit shifting.
When it comes to multinational enterprises, their origins may be traced back to colonisation. The first multinational firms were formed to establish colonial "factories" or port towns in order to supply the growing world population. Additionally, the British East India Company expanded its role beyond just carrying on commerce between the home country and the colonies, becoming a quasi-government in its own right, with local officials and its own army in India. The British East India Company and the Dutch East India Company were the two most prominent instances of this. The Swedish Africa Company and the Hudson's Bay Company were among the other companies involved. These early businesses were involved in worldwide commerce and exploration, as well as the establishment of trading post facilities.
The VOC was taken over by the Dutch government in 1799, and during the course of the nineteenth century, other governments gradually took over private corporations, with the most noteworthy example being the British Indian Railways. European colonial charter businesses were liquidated as part of the decolonization process, with the last colonial company, the Mozambique Company, going out of business in 1972 as the last colonial corporation.