Corporate inversion as strategy is used by companies who receive a significant portion of their income from foreign sources, since income is taxed both abroad and in the country of incorporation. Companies undertaking this strategy are likely to select a country that has lower tax rates and less stringent corporate governance requirements.
One example is the current deal to merge Burger King with Canadian-based Tim Horton’s Cafe and Bake Shop. Horton’s is a Canadian multinational fast food franchise known primarily for its coffee and doughnuts. Founded by Canadian hockey player Tim Horton, it is also Canada’s largest fast food service. At the end of 2013, it had 4,592 restaurants in Canada and another 1,000+ restaurants in the US and Persian Gulf.