MultiNational Corporations

Preented By: Jeyanth.N

International Labour Organisation ³The essential nature of the multinational enterprises lies in the fact that its managerial headquarters are located in one country while the enterprise carries out operation in a number of other countries as well´

Multinational Corporations
Multinational corporation (MNC) or transnational corporation (TNC) or multinational enterprise (MNE) or multinational organization (MNO) It is a corporation/business entity/enterprise that manages production establishments or delivers services in at least two countries.
TYPE OF MNCs:- Multinational corporations (MNC) are often

divided into three broad groups:- 

Horizontally integrated multinational corporations  Vertically integrated multinational corporations  Diversified multinational corporations

Benefits of MNCs
Increases the investment level, income, employment in the host country Vehicles for transfer technology Kindles managerial revolution in the host country Enable the host country to increase their exports Integrate national economies Increase competition and break domestic monopolies

Demerits of MNCs
Objective is world wide profit maximization and not development needs Evade or undermine national economic autonomy and control Destroy competition and acquire monopoly powers Retard growth of employment in home country Fast depletion of non renewable resources in host country

FDI Policy: Most sectors including manufacturing activities permitted 100% FDI under automatic route (No prior approval required) Industrial Licensing : Licensing limited to only 5 sectors (security, public health & safety considerations) Exchange Control: All investments are on repatriation basis. Original investment, profits and dividend can be freely repatriated Taxation: Companies incorporated in India treated as Indian companies for taxation Convention on Avoidance of Double Taxation with 71 countries including Korea

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