Foreign exchange movements affect investments and as a result most investors prefer to stick to British companies. They prefer to stay away from investment assets that are valued in foreign currency. Since almost all the day to day liabilities are denominated in sterling pound, it makes sense for investors to have assets in the same currency. More so since the mortgage is not going to be accepted in Japanese yen or US dollars.

Globalization, however, has allowed many companies to set up their offices overseas, to an extent that the one can question the nationality of the company, especially since the currency in which they make their profits is not the pound.

This brings us to the question of how exactly can the nationality of a company be determined? Textbooks say that the country where the company has its headquarters is the country it belongs to. Now, this can prove to be difficult to determine, seeing how some companies have their base and operations in over a hundred countries. The earnings of a company cannot be determined by its location, and that is an important thing. Take the copper mine, Antofagasta, for instance, whose registered office is in London. Its operations are, however, in Chile, and the accounts are in US dollars.

Some companies do not list their profits on a country to country basis, like Diageo, the spirits giant. Nearly 28% of its sales in the year 2010 were from Europe and Russia, so one can safely say that what happens in the UK does not really affect it. Now, if you want to define a company’s nationality based on where it gets most of its business from, then Diageo is more American than British, given that 34% of its sales are in the US.

Even big companies like Unilever and Procter and Gamble are affected by where their offices and sales are because most British  investors tend to choose Unilever over P&G, since they consider Unilever more British. This happens despite the fact that most of Unilever’s dividends and accounts are in euros, with maximum business conducted by it outside the UK. These companies can be thought of as “Global.”

British investors benefit from the fact that despite conducting business in countries where English is not an official language, these companies generate their reports, news releases and accounts in English. And more often than not, their accounts and papers are easier to decipher and understand than most native British companies.

However, where the question of investor protection and regulation is concerned, having a Nationality becomes an important aspect for the company. Investors are directly affected by the company’s host country, since it has to follow the rules and regulations of that country. This becomes an even bigger concern for investors if the company in question is based out of a country that is not developed, say Russia.

The globalization of the market is changing the way investors think and how much they trust a certain company’s assets. British investors would still opt for a company based out of the UK, but this is a trend that appears to be looking at a change in the near future.

Register with the UK’s top domain name & hosting provider, over 10 years exceptional service & technical support.

http://easily.co.uk