Generally, in the initial stage, multinational companies bring in huge capital in the host country. They invest capital for establishment of plants and to manage working capital. But, as professional business concerns, their main objective is to earn maximum profit. Therefore, in the long run, multinational companies earn more profit by implementing their efficiency and network. They transmit huge profit to their parent country after the payment of necessary taxes. As a result, more money will flow out from the country in terms of dividend which decreases foreign exchange reserve of the country. It creates a shortage of foreign currency reserve in the host country.