The first multinationals kept armies and ran colonial ports
Today's global companies trace their lineage to chartered trading firms of the 1600s. The British East India Company, founded in 1600, did more than buy and sell: it appointed local officials and fielded its own army in India. Two years later the Dutch launched their rival. Business across borders began as a branch of empire.
A multinational corporation owns and controls production or trade in at least one country beyond the one where it is based. Control is what separates it from a fund that simply buys foreign shares to spread risk. Economists prefer the term multinational enterprise and describe the activity as foreign direct investment: putting money into plants abroad in exchange for ownership and a say in management.
The early chartered companies included the Dutch East India Company of 1602, the Swedish Africa Company of 1649 and the Hudson's Bay Company of 1670, all setting up trading posts far from home. Governments gradually absorbed them, the Dutch state taking over its company in 1799. Hudson's Bay lost its monopoly in 1870 but turned its posts into shops and later a department store chain that lasted until 2025. The final colonial charter company, the Mozambique Company, dissolved in 1972.
Mining and oil shaped the next stage. Rio Tinto was founded in 1873 to buy Spanish sulphur and copper mines, and De Beers came to dominate the world's diamond trade from southern Africa. By the 1930s seven oil firms, nicknamed the Seven Sisters, controlled almost all the oil of Iran, Iraq, Saudi Arabia and the Persian Gulf, rigging output to keep prices high. That decade, around 80 percent of multinational investment went into extraction and plantation crops, mostly in colonies.
After the Second World War the focus shifted to factories in rich countries, making cars, chemicals, medicines and electronics. Companies with at least one foreign operation grew from a few thousand before the war to 78,411 by 2007. Language followed money: in 1966 the Swedish bearing maker SKF decided its senior staff and key documents would all switch to English.
Source: Multinational corporation
