Flag of convenience (business)
In business and commerce, the term flag of convenience is the use of a place, jurisdiction, state or country as a nominal (in name only) "home base" for one's operations or charter, even though either no or virtually no operations or business are conducted there. It is also used where the organization operates in one place even though nearly all of its customers are from elsewhere. It is a type of jurisdiction shopping. There are several reasons for doing this. Corporation requirements. The most common use of a flag of convenience is a U.S. corporation  being chartered as a domestic corporation in Nevada or Delaware because of favorable corporate governance rules. The reason for this sort of a choice is that, in general, in the United States, a corporation which operates in more than one state (or country) has a particular state where it is incorporated, to which it is a domestic corporation. In all other states where it operates and has filed papers to be allowed to operate, it is a foreign corporation, and the requirements for corporate governance in the case of a lawsuit do not use the law where the corporation is  sued, but instead, the law where the corporation is a domestic corporation. For example, because the provisions on "piercing the corporate veil" are corporate governance matters, if a corporation is chartered in California, for example, (which has much more creditor friendly provisions permitting this) is sued anywhere, California law applies, but a corporation chartered in Nevada, which operates only in California, is sued in a California court, the California court would use Nevada law in determining what the requirements permitting this, and in this issue Nevada law applies (which is much more supportive of the corporation's interest), even if  the corporation only operates in California and has never had any other contact with Nevada and is simply chartered there as a flag of convenience. Another use is for tax reasons. At least one major software development company licenses its software through a subsidiary Nevada corporation, which has no state income tax, rather than licensing through the parent corporation (chartered in a different state that does have a state income tax), saving millions of dollars in taxes. Legal restrictions on operations. Use of a different base of operations than one normally operates within can often be done because of legal  restrictions on operations in one area which are avoided by changing the nominal base of operations. Television. "See city of license for more information on television and radio."