Operating according to rules set by various counties where it operates is really an important rule for every MNC. Most countries employ local legal counsels to avoid breaking the laws of the countries where they chose to set up a branch. Legal system and policy enviroment related to public service has become a great concern for most of MNC. What they focus on including: good market access,a low level of tariffs and nontariff import barriers, flexible fund procurements, certain tax incentives, the stability of the legal and judicial system, efficient government services. All these factors are varied from countries. If they ignore any of them, problems may appear in a way that never be considered. That is reason why MNC must attach much importance to the territoriality principle. At the time,choosing the most suitable place to run a business has a great impact on interest of MNCs.Thus,territoriality principle should be paid great attention for MNCs.