In this paper, we analyzed the basic tenets of multinational enterprise (MNE) from a theoretical perspective, shedding light on the growing significance of MNEs in today’s global economy. The concept of MNE has been reviewed. We examined two theories of MNE – the trade theory and the transaction cost or internalization theory, in line with emerging global trends. We conclude that no single theory can explain MNE, rather, a combination of theories.