BOX 3: COUNTRIES OF INCORPORATION V COUNTRIES OF OPERATIONS
C ountry of incorporation refers to the jurisdiction in which the company is created. It defines rules of corporate governance, applicable regulatory and tax regimes. Country of operations refers to where a company actually engages in business (holds assets, enters into contracts, maintains premises, generates revenues, employs people, impacts on the environment).
ometimes the country of incorporation and operations are the same, • S sometimes they are different. The following table provides some examples (from the companies assessed) of when the two are different:
Company
Holding
Country of incorporation
Main Country of operations
1
A
Bahamas
Algeria
B
British Virgin Islands
Azerbaijan
C
British Virgin Islands
Russia
D
Cayman Islands
Azerbaijan
E
Cayman Islands
Azerbaijan
A
Cayman Islands
Bolivia
B
Cayman Islands
Egypt
C
Cayman Islands
India
A
Cayman Islands
New York, USA
B
Cayman Islands
London
C
British Virgin Islands
Bangkok
D
Turks & Caicos Islands
Florida, USA
E
British Virgin Islands
New York, USA
A
Bermuda
Indonesia
B
Bermuda
Indonesia
C
Singapore
Australia
D
Isle of Man
Indonesia
A
Jersey
Middle East
B
Bermuda
Hong Kong
2
3
4
5
Transparency International recommends full disclosure of both the country of incorporation and of operations. Such information is critical to multiple stakeholders (investors and citizens) in both countries in order to determine the true nature and extent of a company’s activity.
Transparency in Corporate Reporting: Assessing the World’s Largest Companies
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