Describe reasons for a UK multinational choosing to locate abroad.

You must describe at least 2 reasons to gain full marks.

1 mark for each valid description.

1 mark for each valid development.

A model answer could look something like this:

MNC’s often consider locating in countries that offer more favourable tax regimes such as lower corporation tax rates (1). By a company operating in these countries, it can substantially reduce a company’s overall tax burden and increase profitability (1).

MNC’s can also benefit from economies of scale (1). By expanding operations internationally, businesses can spread their fixed costs over a larger production volume, leading to lower average costs and increased efficiency (1).