Multi-National Corporations are large companies established in a particular country and has offices, markets and produces and sells its products in many countries. There are many aspects that MNCs consider while starting a production unit in a foreign country. Some of these conditions are:

• Closeness to market: An important factor that MNCs consider before establishing their production centres is the proximity to market. They must be able to sell the commodities produced in the market without any difficulties, especially in the case of perishable commodities. They must have easy access to markets and consumers for effectively selling their products.

• Low cost of labour: MNCs will establish their production centres in places where the cost of labour is less. They must have the economic situation in which they are able to recruit both highly skilled works and unskilled workers at a lower wage rate. This forces MNCs to establish their production units in developing countries where people are ready to work at lower wage rates.

• Availability of factors of production: MNCs will establish their production units in places where other factors of production are easily available. Availability of raw materials for production is a very crucial concern. MNCs generally set up their production units close to raw material hubs if they are heavy and bulky. Transportation facility is also an important factor for easy access to markets and raw material hubs. It is the mode by which production centres and consumers are connected. They must also consider the availability of land resources, power and the development of capital markets for raising funds.

• Government policies: MNCs establish their production units in places where the government policies are favourable. If strict legislations and huge taxes are being imposed by the government, MNCs will be reluctant to establish their production centres. Generally, the governments will offer them incentives for attracting foreign capital and investment.