A business domicile is a location which is treated for tax and legal purposes as the headquarters of the business. For a small business such as a retail store, the store itself is the business domicile, while for a multinational company, the domicile is determined by figuring out which location serves as the principle place of business or hub for the business. For legal reasons, the location of a domicile can be critically important.
Both individual people and firms must have domiciles. In the case of people, the domicile is someone's primary residence, which may not necessarily be a location where someone lives full time. For companies, the domicile is the site where the business is headquartered, where decisions about the business are made, and where people would go if they wished to do business with the company in question.
The location of a business domicile impacts its tax liability. For example, if a company is headquartered in a major city, it may have very high taxes because it pays national, regional, and local taxes. Some cities have high tax rates to support services, and locating out of a city can reduce tax liability by eliminating the need to pay municipal taxes. Likewise, a domicile may be located in a tax haven, a location where taxes are minimal, so that the company can avoid paying taxes it might be expected to shoulder if it was headquartered in another location.
Legal issues can also arise, depending on where a company is domiciled. Different nations have different laws about business activities and practices. Companies which wish to avoid restrictive or complicated laws may opt to have a business domicile in a “business friendly” location where these laws are relatively lax. This can make it difficult for customers to mount legal challenges to the business, because as long as the business abides by the laws of the region where it is domiciled, customers may not have recourse to legal remedies.
If people are curious about the business domicile of a company they are doing business, usually communications from a business list its headquarters and branch locations along with contact information. Return addresses on official correspondence from the business can also be a good clue, and it is possible to look up the businesses licenses and public filings to determine which location it is treating as its domicile for legal purposes.