A majority of multinational companies tend to stay within their home region when establishing subsidiaries. (Photo by Mario Tama/Getty Images)

Foreign investment trends often focus on business and trade on a country level, but when it comes to interregional investment, which companies are more inclined to stick to their source region, and which look further afield?

The Monitor Network’s multinational companies (MNCs) database contains information on 2,190 of the world’s top MNCs by revenue. Research from Investment Monitor reveals that most companies prefer to invest close to home, with multinationals from six out of eight world regions establishing more entities within their home region than outside it.

Companies based in Asia-Pacific, CEE and CIS, North America, South America, sub-Saharan Africa and Western Europe establish more subsidiaries within their region. Central American and Caribbean and Middle East and North African multinationals operate more locations outside of their immediate region.

Asia-Pacific, CEE and CIS, and sub-Saharan African investors operate a significantly larger share of subsidiaries within their home region, while the proportion is more evenly split for those from North America and Western Europe.


  • Asia-Pacific companies make up the largest share of the MNCs included in the Monitor Network’s multinational companies database. They represent 36% of the 2,190 companies analysed.
  • Of these 788 Asia-Pacific companies, more than one-fifth are in financial services. There are more financial services MNCs headquartered in Asia-Pacific than any other region. Technology, communications and electronics (14.6%) and construction (11.2%) are the next most popular industries.
  • Overall, Asia-Pacific companies predominantly favour investing within their domestic region. Of the 40,398 subsidiaries created by the top MNCs based in Asia-Pacific, 77.9% are located within the region.
  • In certain Asia-Pacific countries, these proportions are extremely high. More than 90% of subsidiaries created by companies based in China and Indonesia are based within the Asia-Pacific region.
  • Indian MNCs have a more even distribution of their subsidiaries, with 51.2% located in Asia-Pacific.
  • Outside of their home base, the top destination regions for Asia-Pacific investors are Western Europe (3,103 subsidiaries), North America (2,451) and Central America and the Caribbean (1,651).

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  • Of the top 2,190 multinational companies analysed, just 1.2% are based in the CEE and CIS region.
  • More than half of these CEE and CIS companies are headquartered in Russia (15), followed by Poland (six) and Turkey (three). One-third are in the financial services industry, 29.6% are in oil and gas and 14.8% in metals and mining.
  • In general, central and eastern European companies prefer to establish subsidiaries within their region. Of the 1,317 subsidiaries created, 76.3% are located within the CEE and CIS and 23.7% outside of the region.
  • All 27 CEE and CIS multinationals included have established more subsidiaries within their region than outside of it.
  • Western Europe was the second most popular region for investors with 228 subsidiaries, followed by Asia-Pacific (29) and North America (20).

Central America and the Caribbean

  • Only 21 of the top 2,190 multinational companies analysed are headquartered in Central America and the Caribbean, 12 of which are based in Mexico and nine in Bermuda.
  • Of the companies based in Bermuda, more than half are in financial services. In Mexico, one-quarter are in consumer packaged goods and another quarter are in financial services.
  • The top Central American and Caribbean companies operate 785 subsidiaries and 60.8% are located outside of their domestic region.
  • More than 80% of subsidiaries established by Bermuda-based MNCs are located outside of the region.
  • Bermuda is considered a low-tax jurisdiction, with companies incorporated there benefiting from zero corporate income tax. North America is the leading destination region for Bermuda-based companies, accounting for more than 40% of its subsidiaries.

Middle East and North Africa

  • Companies based in the Middle East and North Africa represent 1.9% of the MNCs examined. More than half are in the financial services industry, followed by technology, communications and electronics (14.6%) and chemicals (7.3%).
  • More than one-third of the 41 Middle East and North African companies are based in Saudi Arabia, followed by the United Arab Emirates (seven), Israel (six) and Qatar (six).
  • Overall, 54.3% of the 935 subsidiaries established by Middle East and North African companies are located outside of their home region, mainly in Western Europe (168), Asia-Pacific (94), and Central America and the Caribbean (63).
  • Companies based in Saudi Arabia, Morocco, Israel and the UAE operate a higher percentage of subsidiaries outside of the Middle East and North Africa region than within it, while Egypt has an even split. Kuwait, Qatar and Bahrain-based MNCs operate more subsidiaries in their home region than in the rest of the world.

North America

  • North American companies account for 35.6% of those included in the MNC database. One-fifth are in technology, communications and electronics followed by financial services (15.9%) and construction (8.7%).
  • Of the 779 leading North American companies, an overwhelming share are based in the US (92.3%) with 7.7% from Canada.
  • These MNCs are responsible for the creation of approximately 90,000 subsidiaries, the largest amount created by multinationals in all regions.
  • More than 58% of subsidiaries created by North American companies are located within their home region, and 41.3% in the rest of the world. This is a more even split compared with Asia-Pacific or CEE and CIS investors.
  • Outside of North America, the top destination regions for subsidiaries are Western Europe (17,553 subsidiaries), Asia-Pacific (8,740) and Central America and the Caribbean (4,374).

South America

  • South American companies constitute 2% of the top 2,190 MNCs. The majority of these 44 corporations are headquartered in Brazil (34), followed by Chile (four).
  • The most popular industries for South America’s leading multinationals are financial services (13), retailing (six), consumer packaged goods (five) and oil and gas (five).
  • More than 60% of the 1,389 subsidiaries created by the top South American companies are located within their own region, followed by Western Europe (163) and Central America and the Caribbean (135).
  • Colombian multinationals are the only companies within South America to establish more subsidiaries outside of their home region, with 65.1% of their entities located in the rest of the world.

Sub-Saharan Africa

  • Companies in sub-Saharan Africa make up just 0.7% of the world’s top 2,190 MNCs, the smallest share of all regions analysed.
  • South Africa was the most popular headquarter location for the region’s top companies, with 80% of MNCs based there.
  • Of the 588 subsidiaries established by sub-Saharan African companies, more than 70% were located within their home region, followed by Western Europe (13.4%) and Asia-Pacific (7.1%).
  • The top companies from Kenya, Mauritius and Nigeria overwhelming favour their home region with 100%, 94.9% and 95.9% of their respective subsidiaries located in sub-Saharan Africa.
  • South African companies have the lowest proportion of sub-Saharan African subsidiaries, with 55.4%. The UK, Australia and the Netherlands are among the top international destinations for South African investors.

Western Europe

  • Western European companies account for more than one-fifth of the top 2,190 MNCs.
  • Almost one-quarter of the 475 Western European companies analysed are based in the UK, followed by France (70) and Germany (58).
  • One-fifth of Western European multinationals are in the financial services industry, 11.8% in technology, communications and electronics and 8.4% in construction.
  • In total, the top Western European companies operate more than 80,000 subsidiaries, 57.1% of which are based in their source region, 12.1% in Asia-Pacific and 11.9% in North America.
  • Companies from most Western European countries establish more locations closer to home, including the UK (60.6% of subsidiaries within the region), Germany (58.8%) and Spain (51.4%).
  • However, there are a few countries that buck this trend such as investors from Denmark (62% of subsidiaries are established in the rest of the world), Switzerland (57.1%) and Ireland (52.9%).

For many global companies establishing a subsidiary within their home region is an appealing option, from the logistical benefits associated with being in close geographic proximity to having a better understanding of the local business environment. It can often be less risky than entering a completely new market. However, companies operating entities outside of their domestic region also benefit in a variety of ways, from tapping into a wholly new market, to gaining access to different industry clusters and talent pools.