What is an Alien Corporation?

In today’s world, many corporations operate with a multinational array of divisions and locations that may be located in many places around the world. Often, the main operations of a corporation may be based in one country, while the incorporation of the company may actually reside in a different country. This forms the basis for the designation of an alien corporation. In terms of United States corporate law, an alien corporation is any company that is incorporated outside the United States, but operates facilities within the USA.

It should be noted that there is a difference between alien corporations and foreign corporations, although the two terms are often used interchangeably. In the strictest sense, a foreign corporation is used in two different ways within the United States. First, the term foreign corporation is often used to refer to a company that operated within one state of the country, but is actually incorporated as a US firm in another state. The second common application of foreign corporation is that of a firm that is incorporated outside the United States, has no physical facilities within the country, but does use distributors in the United States to sell their goods or services.

In one respect, alien corporations and foreign corporations do have two attributes in common. Both types of business entities are officially incorporated outside the United States. Second, both of them do business within the United States. The big difference is that an alien corporation will operate plants, retail outlets, and other forms of tangible presence within the country under their own name. A foreign corporation will also conduct business in the United States, but in an indirect manner, choosing to use agents and other means to market their goods and services.

To the consumer, there may not appear to be any great advantage to knowing whether a company is an alien corporation or a domestic corporation. However, it is important to note there are differences in the ways goods and services are taxed, based on where the actual incorporation of a country resides. This may have some impact on the availability of the goods and services, as well as the prices that are charged.

In actual practice, many of the most popular corporations operating within the United States today are actually alien corporations that have established a solid presence within the country, supplying a number of jobs to citizens and supplying reliable products to the general populace. For this reason, the fact that a corporation is actually classified as an alien corporation is usually not a cause to seek similar goods and services from another company that is incorporated within the United States.