The UK is still a big draw for investment from the US, particularly in financial services. (Photo by Justin Tallis/AFP via Getty Images)

Globalisation has connected many countries and the need to serve and trade with overseas markets is ever prevalent, but when it comes to establishing a subsidiary, which locations are companies attracted to?

The Monitor Network’s multinational companies (MNC) database contains information on 2,190 of the world’s top MNCs by revenue, including how many subsidiaries they have and where they are located. Of these, 1,401 companies are located in the US, Japan, China, India and the UK. These countries account for 64% of the total companies analysed.

Key findings

• Companies based in the top five MNC countries favoured their home market to any other country when establishing a subsidiary.
• The US ranked in the top five countries for establishing a subsidiary for companies based in China, India, Japan and the UK. The economic dominance of the US market makes it an attractive investment destination for companies.
• Despite former US President Donald Trump imposing tariff and trade barriers with China, US companies have 1,860 subsidiaries in China while Chinese companies have only 122 subsidiaries in the US.
• Chinese companies keep their subsidiaries close, with 84% in the domestic market.
• Indian companies have the biggest spread of overseas subsidiaries, with 62.2% located outside the country.
• Western Europe is the top region for companies to establish a subsidiary, with 30.8% of subsidiaries located in the region.

US companies have 1,860 subsidiaries in China

There are 719 companies from the US in the MNC database, which have set up a total of 87,404 subsidiaries globally, of which 56.1% are in their domestic market. The US claims to have ‘no closer partner than the UK’ and with 5,266 subsidiaries established in the UK by US companies – the largest overseas market for US companies – it is clear US companies value the UK market. China is the base for just over 2% of US companies’ subsidiaries, which accounts for 4.8% of US companies’ international subsidiaries. Despite tensions over technology and trade, China remains an important market for US investors that recognise the benefits of having a presence in the Chinese market.

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Japanese companies maintain foreign outlook

The top 264 Japanese companies have established 10,476 subsidiaries globally. These companies have close to a 50-50 split when it comes to setting up subsidiaries at home or overseas, with 49.1% of subsidiaries set up in Japan and 50.9% overseas. Overseas markets are spread regionally, with the US top, accounting for 8.8% of Japanese subsidiaries. China ranks third as a destination for Japanese subsidiaries with 675 established.

Chinese companies keep their subsidiaries close to home

Of the 219 Chinese companies analysed, 12,133 subsidiaries were established, with 84% in the domestic market, highlighting just how protectionist the country’s economy is. A further 4.9%, or 589 subsidiaries, are based in Hong Kong. China and Hong Kong combined account for 88.9% of Chinese companies’ subsidiaries. The US accounts for 1% of subsidiaries (122) from Chinese companies. Trump’s tariff and trade barriers, introduced in 2018, aimed to discourage Chinese investment in the US, and although trade flows have been hit, US imports from China surged in 2020. Current US President Joe Biden looks set to continue to challenge China’s trade practices.

UK companies still favour the US market

The 118 UK MNCs analysed established 22,464 subsidiaries globally. For UK companies setting up subsidiaries, the US is home to more than four times as many subsidiaries (2,800) as the next largest overseas market. The US is the leading export country for the UK, and the largest overseas market for UK companies to establish a subsidiary. The nearby European markets of France, Ireland and the Netherlands received 1,935 subsidiaries collectively, accounting for 8.7% of subsidiaries established by UK companies.

Indian companies look overseas for subsidiaries

The 81 India-based companies analysed in the MNC database have 3,489 subsidiaries globally. Of the five countries featured, Indian companies locate the lowest proportion of subsidiaries on their home turf, with 1,319 subsidiaries (37.8%) established domestically. The UK is the top overseas market for Indian companies to establish a subsidiary with just over 7% located in the UK. India and the UK are set to finalise their ‘Roadmap 2030’ in the second quarter of 2021, focusing on India-UK relations in areas such as trade, investment, defence and security cooperation, healthcare and climate action.


Reviewing the data for all 2,190 of the world’s top MNCs, which have established 216,898 subsidiaries in total, the narrative remains the same: all companies favour their home region when establishing a subsidiary.

Western Europe is the top region for companies to establish a subsidiary, with 68,124 subsidiaries set up there, accounting for 31.4% of the total. North America follows closely behind, accounting for 30% of subsidiaries (65,172).

Relationships between countries can dictate patterns of trade and FDI. Maintaining relationships with countries and building new ones are essential for globalisation and to allow companies to spread their reach. The China-US trade war, Brexit and Covid-19 may all impact where investors choose to locate in the future.