Multinational Companies (MNCs) in the United Kingdom
3E Accounting helps you answer the call of globalisation with multinational companies (MNCs) in the UK.
Multinational companies or MNCs have been around for centuries and is very much a part of the United Kingdom’s colonial history. As empire builders, Great Britain controlled the administration of its far-flung colonies by commissioning MNCs to ply the trade routes. The very first was none other than the East India Company, founded in 1600 by the British. It spearheaded trade and exploration, with trading posts located in other countries. Today, MNCs are global market drivers, expanding worldwide to maintain competitiveness. Setting up multinational companies (MNCs) in the UK is very much on-trend with globalisation. It is part of the strategic global alliance of emerging economies that work on an international scale.
Trading All Over the World
As a business grows, the need to scale up operations will also exponentially expand. The production and supply of goods and services then have the viability to take on international dimensions. The UK’s service sector alone contributes to almost 80% of its gross domestic product (GDP). While MNCs may exploit labour or deskill some jobs, they do drive economic growth. MNCs also tend to introduce new technologies, create more jobs, and raise the standard of living.
MNCs are defined as having assets, operations, and facilities in one or more countries other than its home country. The usual type of MNC has a centralised head office that coordinates worldwide management. They are huge corporate organisations with massive budgets and employees numbering well into the thousands. Some of the top MNCs in the UK include Shell, British Petroleum or BP, and Prudential Public Limited Company.
It is important to note that merely having some trade in other countries is insufficient to qualify as an MNC. A corporation must have business operations in two or more countries other than its home country to be known as an MNC. Online businesses, for example, should have distribution centres in countries other than the home country.
Big corporations favour several different models of MNCs, and these include the following:
- The corporation is global and builds on its research and development facilities.
- The corporation is centralised but becomes global to capitalise on economies of scale.
- The strongest presence is in the home country, but the corporation itself is decentralised.
- A corporation that combines all three into a hybridised version known as a transnational corporation. These types of MNCs have headquarters and operations in more than two countries.
MNCs are on the rise and bring much needed foreign direct investment (FDI) with them. Most MNCs prefer to have operations based closer to their targeted international markets. Other factors include competitive tax regimes, flexible wage market, and advanced infrastructure. As Europe’s gateway, the UK is ideally suited for MNCs, especially with its strong regulatory framework and incentivised labour market.
Globalisation has undoubtedly opened the door for multinational companies (MNCs) in the UK. If you are ready to take advantage of this opportunity, 3E Accounting is on hand to assist. Along with our international affiliates and partners, 3E Accounting offers global expertise par excellence. Our customisable and innovative business solutions are delivered with impeccable professionalism. Contact 3E Accounting today to begin your global business ventures.