Definition: Parent company

Category: Foreign direct investment

a) Inward investment

The parent company of an affiliate under foreign control in a compiling country is the first foreign investor outside the borders of this country, exercising direct or indirect control over the foreign affiliate. If the first foreign investor is also under foreign control, the parent company could be a company other than the ultimate control company at the head of the group.

b) Outward investment

From the point of view of a compiling country, the parent company of its affiliates abroad controlled by residents of this country is the consolidated enterprise (enterprise group) comprising the domestic firms which the preceding firm controls directly or indirectly in the compiling country. http://ec.europa.eu/eurostat/ramon/statmanuals/files/OECD_Handbook on_Eco_Glob_Indicators.pdf