MNCs take into consideration certain factors to set up their production units in a particular areas. These areas are generally:
(i) Where markets are close by.
(ii) Where skilled and unskilled labour is available at low costs.
(iii) Where the favourable government policies which look after their interests are present.
(iv) Where the other factors of production such as raw materials, water, electricity and transport are available and assured.
(v) Where there are standard safety measures for assured production.