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What is MNC

>> November 20, 2011


MNC means multinational corporation. If any company's head office in one country and its business activities are  in many countries, that company will be called multinational corporation. Its other popular name is multinational enterprise. These corporation is also called transnational corporation. Multinational corporation starts from their own country but they increase their business level and they do business many countries as per the rules and regulations of different countries.


Foreign Exchange Regulation Act 1973 applies on MNC. As per this, a corporation will be MNC, if

1) Its subsidiary or branches are in two or more countries. All these countries will be host countries for him.

2) Its head office is outside of India. His own country will be home country for him.

British East India company is first MNC who issued shares and created stock. More than 400 years history of big MNCs and its development. Every corporation starts his business as MNC because it has to get tax benefits. It has to get low labor cost benefits. It has to get marketing benefits. Large number of MNCs are from developed countries. There are big competition, so these corporations go to developing countries for their own benefits. By opening branches or subsidiaries in developing countries, they can produce their products at cheap material and labor cost.

What is MMNC?

It means micro multinational corporation. It is just like multinational corporation but at micro level. With the help of internet, anyone can make MMNC by creating or using e-commerce website or providing international service.

Features of MNC

1. Board of directors will be of home country.

2. MNCs do business with direct investment. It means these MNC will have right to buy land and make plant. It also have right to produce the products and sell the products in other country.

3. MNCs's advertising lobby is very advance. They want to sell every thing on the basis of high advertising whether it is quality product or not. 




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