foreign corporation

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A foreign corporation is a corporation which is incorporated or registered under the laws of one state or foreign country and does business in another. In comparison, a domestic corporation is a corporation which is incorporated in the state it is doing business in. The nature of the corporation (foreign or domestic) will impact several aspects of the corporation’s organization, such as the requirement to be registered as a foreign corporation in the place of business: a foreign corporation must file a notice of doing business in any state in which it does substantial business. The ‘’foreign” qualification to a corporation might also make it subject to tax requirements, such as the requirement to pay state taxes.

Failure to follow the specific rules set by the state or country regarding foreign corporations – absence of adequate registration for example – could lead to penalties, such as fines or injunctions to prevent the corporation from conducting further business in that state.

[Last updated in February of 2022 by the Wex Definitions Team]