Corporate Nationality Reconsidered: Four Facets, Two Emerging Tests

U.S. Steel is wholly owned by Nippon Steel, a Japanese corporation. Its CEO nonetheless maintains that the company is “absolutely” still American, with a “fiduciary duty” to U.S. national security. When Congress declared TikTok “controlled by a foreign adversary” in 2024, the platform’s parent was incorporated in the Cayman Islands, its American user data was stored in the United States, and global institutional investors held roughly 60% of its equity. Neither characterization follows readily from the classical tests of corporate law, which makes them instructive.

For more than a century, legal systems have assigned corporate nationality through three principal tests: the jurisdiction of incorporation, the real seat of management, and control through voting equity. The tests vary across countries and contexts, but they share an assumption – that some legal attribute of the firm settles the question. As late as 2006, a leading business historian could describe the nationality of a firm as “rarely ambiguous.”

In a recent ECGI Working Paper, we argue that this account was not wrong but it has become incomplete. Corporate national identity (CNI) today emerges from the interaction of four facets – legal, economic, (geo)political, and symbolic – whose relative salience varies across contexts and over time. Drawing on case studies involving TikTok, Shein, Pirelli, and Nippon Steel’s acquisition of U.S. Steel, we show how CNI is increasingly contested and actively reconstructed. 

Three factors explain the shift. First, economic interdependence, built over decades of hyperglobalization, has itself become a weapon in times of growing international tensions. Because full decoupling from China is impracticable, states restrict rather than sever, often through governance arrangements tailored to individual firms. Second, the growing centrality of data and dual-use technologies gives new geopolitical weight to private companies and the data-access rights of investors from rival states. Third, China’s distinctive system of state influence over private firms has expanded conventional understandings of control, prompting similar behavior from its rivals. A complication runs through all of this: it is often difficult to distinguish genuine security concerns from their opportunistic assertion by local interests. The difficulty recurs across our case studies.

TikTok and Shein are Chinese-founded companies with multiple elements pointing away from the PRC. These did not prove decisive. Congress reassigned TikTok’s nationality by statute, and the Supreme Court upheld the divest-or-ban law on a notable ground: neither incorporation nor equity ownership or control, but the unique risk that Chinese authorities could obtain access to the platform’s data. The resolution was equally novel. In January 2026, TikTok’s U.S. operations passed to a joint venture controlled by U.S. investors, with an Abu Dhabi sovereign wealth fund among the minority investors. ByteDance retained 19.9%, just below the statutory control threshold, and continues to license the recommendation algorithm the statute was designed to sever.

Shein sought to reshape its legal and symbolic identity years in advance. It reincorporated under a Cayman parent, relocated headquarters and intellectual property to Singapore, and its founder even acquired Singaporean citizenship – “Singapore-washing,” in the Financial Times’s label for the wider trend. The effort fell short: Shein’s production remains anchored in Guangzhou’s garment clusters. Western politicians and advocacy groups continued to read the company through its supply chain, contributing to the failure of IPO attempts in New York and London. In February 2026, the founder made his first ever major public appearance, standing before Party leaders in Guangdong to affirm the company’s Chinese roots – a reversal widely read as directed at securing Beijing’s approval for a Hong Kong listing. 

Pirelli and U.S. Steel present the mirror image: Western companies whose national identities were reconstructed by their own governments, midstream, through governance instruments rather than ownership. Italy invoked its Golden Power to curtail the governance rights of Pirelli’s largest shareholder, a Chinese state-owned enterprise – restrictions imposed years after the investment closed, with the equity ownership left untouched. Sinochem retains 34% of Pirelli’s shares but is now effectively excluded from its governance. Proponents cast the intervention as a necessary safeguard for strategic technology, whereas critics see an erosion of legal certainty for foreign investors.

The United States went further. Nippon Steel’s acquisition of U.S. Steel closed only after a “golden share” was written into the company’s charter, granting the government approval rights over plant closures, headquarters relocation, and investment and employment levels – rights exercised by President Trump personally while he holds office, and by federal agencies thereafter. When U.S. Steel moved to idle its Granite City plant in September 2025, the administration invoked its powers, and the company reversed course. 

Across the cases, two new tests of corporate nationality are beginning to take shape. The first is what we call a “data seat” doctrine, under which data location and access serve as markers of CNI. The Supreme Court’s TikTok ruling, Italy’s restrictions on Pirelli’s tire-sensor data flows to China, and the U.S. connected-vehicle rule – which reaches Chinese-linked intellectual property irrespective of ownership thresholds – each reflect this logic. The second is a government influence test: an inquiry into state leverage that extends beyond voting equity to statutory cooperation duties, Communist Party committees, special management shares, and golden shares written into corporate charters.

The government influence test raises a question beyond China. Measured by the criteria Western governments apply to Chinese firms – substantial state influence over corporate governance, untethered from equity ownership – Pirelli and U.S. Steel now resemble the state-owned enterprises their governments warn against. Our paper asks whether the concept of a state-owned enterprise should be broadened accordingly.

The classical legal tests for CNI are still relevant, but have become incomplete. The data seat doctrine and the government influence test are beginning to crystallize to incorporate new factors. Neither is fully formed, and both will evolve, because the forces producing them are not receding. Corporate nationality is by no means settled. It is a live question, answered in real time by states, markets, and the firms caught between them. Corporate law will not escape the contest, as these factors have significant relevance for the definition of corporate control, the scope of private ordering, and the shaping of board strategy. 

Curtis J. Milhaupt is the William F. Baxter-Visa International Professor of Law at Stanford Law School, a Senior Fellow of the Freeman Spogli Institute for International Studies at Stanford University, and an ECGI Research Member  

Mariana Pargendler is the Beneficial Professor of Law at Harvard Law School, and an ECGI Research Member.

Dan W. Puchniak is the Yong Pung How Professor at Yong Pung How School of Law, Singapore Management University and an ECGI Research Member.

This blog is based on a paper presented at the twelfth annual Global Corporate Governance Colloquia (GCGC), hosted by the National University of Singapore and ECGI. Visit the event page to explore more conference-related blogs.

The ECGI does not, consistent with its constitutional purpose, have a view or opinion. If you wish to respond to this article, you can submit a blog article or 'letter to the editor' by clicking here.