Final answer:
A company referred to as a citizen of the country where its subsidiary is located means it is registered and incorporated there, thereby following that country's laws, and contributing to its economy and taxes.
Step-by-step explanation:
When a company is referred to as a citizen of the country where the subsidiary is located, it means that the company is registered and incorporated in that country. This implies that the company has established itself legally within the country's borders and is recognized by the government as a domestic entity. Such corporations often become deeply integrated into the local economy and subject to the country's laws, customs, and taxation system.
Subsidiaries of multinational corporations (MNCs) are examples of how a larger company based in one country can operate as a local entity in another. These subsidiaries are essential to the presence and operations of the MNC in foreign territories, contributing to the country's GDP, circular flow, and business cycle. Despite their origin, these subsidiaries must adhere to the corporate taxes and legislation of the country they operate in, similarly to domestic businesses.