What types of companies are there according to their geographic scope?

Learn about the classification of companies according to the territory in which they operate
When it comes to starting a business, it is essential to be very clear about what geographic scope we intend to cover, since depending on the extent of the area they operate in, companies can be classified as local, national, European, multinational and global. Let's go over the main characteristics of each of these categories:
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  • Local companies: these are companies with operations focused in a nearby environment, such as the town where they are located, or their county, province or region. Therefore, the term "local" is usually used to refer to county, province or region-wide companies. The majority of companies in Spain fall into this category, hence their importance to the national economy.
  • National companies: these are companies that operate throughout the national territory, even if they have their headquarters in a specific place. Over time, they usually become European companies
  • European companies: thanks to the absence in Europe of trading barriers, the physical proximity of the different countries and their cultural affinity, national companies tend to expand their operations abroad, usually choosing to expand into countries of the European Union, hence the term "European".
  • Multinational companies: those that expand their scope of operations to several countries around the world. For a company to be considered a multinational, it is not enough to simply export. The company's presence abroad needs to be established, with production and distribution centers located in the destination country.
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As one would expect, the majority of companies begin operating in a small territory, i.e. they start as local companies. The passage of time and businesses' achievement of success is what usually makes these companies grow, covering an increasingly large geographical area.
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