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E-MailCurtis J. Milhaupt is the William F. Baxter – Visa International Professor of Law at Stanford Law School, Mariana Pargendler is the Beneficial Professor of Law at Harvard Law School, and Dan W. Puchniak is the Yung Pung How Professor of Law at the Yong Pung How School of Law, Singapore Management University. This post is based on their recent paper.
What makes a corporation American, Italian, Chinese, or any other nationality – and who gets to decide?
In a new paper, we examine how the national identity of corporations is increasingly contested in the contemporary global economy. Corporate national identity (CNI) can no longer be understood as a fixed legal attribute determined solely by jurisdiction of incorporation, location of administrative headquarters, or corporate control through equity ownership. Rather, CNI emerges from the interaction of four interrelated facets – legal, economic, (geo)political, and symbolic – whose relative salience varies across contexts and over time. The central implication is that corporate nationality is not a unitary status, but a contingent and contested construct.
Traditional legal tests of corporate nationality remain important, but they no longer fully capture how states, regulators, investors, and the public identify corporations in an era of heightened geopolitical rivalry and digital interdependence. Increasingly significant are factors such as supply-chain geography, data location and access, state leverage over private firms, and efforts by corporations to shape public perceptions of their identity. One prominent example of the latter strategy is “Singapore washing,” especially by Chinese founders hoping to shed their outward affiliation with China.
Within this broader framework for determining CNI, we identify two emerging developments. First is what we call a “data seat” doctrine, under which data location and access function as markers of corporate nationality. Second is a “government influence” test that extends beyond formal voting control to examine the degree of leverage states may exercise over firms through legal obligations, party committees, regulatory authority, or governance rights inserted into corporate charters.
The article illustrates the interaction of these facets through four case studies involving TikTok, Shein, Pirelli, and Nippon Steel’s acquisition of U.S. Steel.
The TikTok case illustrates how contemporary disputes over corporate nationality increasingly center on data access and geopolitical influence rather than formal corporate structure alone. ByteDance, TikTok’s parent company, is incorporated in the Cayman Islands, its U.S. operations are conducted through American entities, and a majority of its equity is held by global institutional investors, even as the company’s founder, a Chinese citizen, retains voting control. Nevertheless, a divest-or-ban statute enacted by the U.S. Congress in 2024 deemed TikTok to be “controlled by a foreign adversary” (i.e., the Chinese government). The statute’s validity was upheld against constitutional challenge by the U.S. Supreme Court, which accepted the government’s concern that Chinese authorities could harm national interests by obtaining access to user data or influencing the platform’s content recommendation algorithm. The eventual restructuring of TikTok’s U.S. operations into a new joint venture with majority American ownership and voting control reflects a potential shift away from a binary approach in which foreign investments are either approved or blocked at the outset, toward more intrusive forms of midstream governance reconfiguration.
Shein’s frustrated attempts to IPO on the New York Stock Exchange and London Stock Exchange amidst controversy over alleged use of forced labor in its supply chain highlights the limits of legal and symbolic efforts to reconstruct corporate identity. Shein’s founder obtained Singaporean citizenship, reincorporated the company offshore, relocated management functions to Singapore and localized data storage. Yet Shein continued to be considered “Chinese” because its production network and supply chain remain deeply embedded in China. In this instance, the company’s economic geography outweighed its legal restructuring and symbolic repositioning.
The Pirelli and U.S. Steel examples illustrate the increasingly direct role governments play in reconstructing corporate nationality through governance rights rather than ownership. In Italy, authorities invoked “golden power” provisions to strip governance rights from the Chinese state-owned shareholder of Pirelli and effectively restore the company’s Italian identity and its control by an Italian shareholder without altering the underlying ownership structure. In the United States, the acquisition of U.S. Steel by Nippon Steel proceeded only after the U.S. government secured extraordinary governance rights through a “golden share” arrangement granting President Trump veto authority over major corporate decisions, ostensibly on national security grounds. Post acquisition by its new Japanese parent, the CEO of U.S. Steel declared the company to be “absolutely” still American and asserted that he owes a fiduciary duty not only to the company’s shareholders, but to U.S. national security.
The fluidity and contestability of CNI raise important implications and novel uncertainties for corporate governance, investor protection, and cross-border investment. As governments increasingly intervene in corporate governance arrangements on geopolitical and national security grounds, corporate boards and investors face new questions that traditional corporate law doctrines do not address. For example, how will corporate law respond to the conceptual expansion of “corporate control” from equity ownership or indirect influence on board decision-making to operational factors such as the location or accessibility of data, or political factors such as the presence of CCP committees in Chinese corporations? As firms increasingly become national security partners of their home governments, does this complicate the question of corporate purpose and expand the scope of fiduciary duties? What remedies, if any, are available to a shareholder or acquirer if state intervention in a company’s corporate governance on national security or industrial policy grounds reduces firm value or impairs the rights of specific shareholders? Early signs are that private ordering may be used to respond to some of these uncertainties, while boards of directors will increasingly undertake CNI engineering as a form of geopolitical risk management.
The article situates these developments within the broader transformation of the global economy, in which states increasingly exploit the vulnerabilities of interconnected economic networks for strategic advantage. In this environment, corporate governance itself has become a site of geopolitical contestation.
