Difference Between Domestic Business and International Business


Main Difference

The main difference between Domestic Business and International Business is that Domestic Business is the trade which takes place within the geographical boundaries of the country, whereas International Business is the trade which occurs between two countries internationally.

Domestic Business vs. International Business

Domestic business defined with the view of areal limits in mind; international business is not limited and exceeds beyond areal limits of a country. Domestic businesses only follow providing and facilitating restricted exchanges between the people in a given country whereas the international businesses operate over a broad scope of supply and consumerism between many countries. Meanwhile, domestic businesses do not take to be very caveats or stringent on the quality of products. International businesses must secure, and maintain very high standards in the quality of products or services offered. In most cases, domestic business costs less to establish and generally performs trade using local currency. On the other hand, international businesses inquire for a lot of money, but they depend on foreign currency to harmonize their trade. The domestic business has an easier approach in doing consumer research while determining the best product to use. An international business must explore extensively, to understand what the consumer demands, and behavior when trying to establish the endurance of the business. In the context of domestic businesses, the flexibility of these factors is easier to achieve, more than how you would achieve the flexibility of production factors for international businesses. Things or items such as transport and installation of production implements are far easy to achieve in a domestic business compared with international business.


Comparison Chart

Domestic BusinessInternational Business
A business considered domestic when its economic transactions conducted within the geographical boundaries of the country.International business is one who is engaged in an economic transaction with several countries in the world.
Happens within one country.Can happen in more than one country.
Quality of Products/ services
Standards may be lower.Very high standards expected and enforced.
Researching business is easy.Research processes for the business are very expensive and hard to conduct.
Mostly depends on local currency for transactions.It depends on foreign currencies for transactions.
The capital investment is not as high.Capital investment is extremely high.
Production Factors
There is a free and easy movement of the factors of production.The movement of production factors is limited.

What is Domestic Business?

The business transaction or dealing that occurs within the geographical or sectional limits of the country is known as domestic business. It is a business entity whose commercial actions performed within a nation. Alternately known as internal business or occasionally as home trade. The producer and customers of the business both reside in the country. In domestic trade, the buyer and seller relate to the same country, and so the trade contract is based on the practices, laws, and customs that pursued in the country. There are many rights which a domestic business enjoys like low transaction cost, less duration among production and sale of products, low transportation cost, promotes small-scale enterprises, etc.

What is International Business?

International Business is one whose manufacturing or production and trade occur beyond the borders of the home country. All the economic actions indulged in cross-border transactions come under international or external business. It comprises all the commercial activities like sales, investment, logistics, etc., in which two or more countries are intricate. The company managing the international business is known as a multinational or transnational company. These companies enjoy an immense customer base from different countries, and it does not have to depend on a single country for resources. Further, international business expands trade and investment among countries. Though, there are several drawbacks which act as an obstacle to entry in the international market like rates and quota, political, sociology-cultural, economic and other elements that affect the international business.

Key Differences

  1. Domestic Business determined as the business whose fiscal or economic transaction conducted within the boundary limits of the country. International Business relates to a business which is not restricted to a single country, i.e., a business which is involved in the economic transaction with several countries in the world.
  2. The attribute standards of products and services provided by a domestic business are quite low. Conversely, the attribute standards of international business are very high which set according to global standards.
  3. Domestic Business needs comparatively less capital investment as compared to international business.
  4. The type of customers of domestic business is more or less the Contrary, international business wherein the nature of customers of every country it serves is different.
  5. In the domestic business, factors or elements of production are mobile whereas, in international business, the mobility of factors of production restricted.
  6. The domain of operation of the domestic business is limited, which is the home country. On the other hand, the domain of operation of the international business is vast; i.e., it assists many countries at the same time.
  7. Domestic business relates to the currency of the country in which it operates. On the contrary, international business relates to multiple
  8. Domestic Business has some restrictions, as it is contingent on rules, law taxation of an individual country. As against this, international business is contingent on rules, law taxation, tariff and quotas of many countries and therefore, it has to confront many restrictions which are barriers in the international business.
  9. The business study or research can be conducted easily, in domestic business. As against this, in the case of international research, it is difficult to conduct a business study or research as it is expensive and research reliability varies from country to country.


It is better off to conduct a domestic business than it is to manage the international business. Whereas international trade would prefer a domestic business in increased returns, there are many factors, containing politics that prevent the growth of businesses onto a world level.