A state-owned enterprise (SOE) is a business in which the state exercises ownership or control. The government does not have to own every share: voting rights or other powers that give it decisive influence can also qualify. State ownership can shape a company’s governance and decisions, and the company may also have public-policy responsibilities. Its effects depend on the enterprise’s mandate, governance and market—not ownership alone.
What counts as a state-owned enterprise?
The OECD’s 2024 Guidelines on Corporate Governance of State-Owned Enterprises define an SOE as: “Any undertaking recognised by national law as an enterprise, and in which the state exercises ownership or control.” The definition covers common corporate forms and can include statutory corporations whose activity is largely economic.
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That is the OECD’s framework, not a universal legal test. A country’s laws may define SOEs differently or use another label, so whether a particular company qualifies depends on its jurisdiction and circumstances.
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Ownership is not limited to 100% state ownership
The state can exercise ownership through direct or indirect shareholdings. Control may also arise from majority voting rights or other rights that give the state decisive influence—for example, certain powers to appoint board members or the chief executive, or veto rights. The relevant question is what the state can control, not simply what percentage of shares it holds.
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Regulation alone does not normally make a company an SOE
Governments regulate private companies, sometimes extensively. Under the OECD framework, ordinary bona fide regulation by itself does not normally turn a company into an SOE; the distinction is whether the state exercises ownership or control.
Why do governments own enterprises?
There is no single reason for state ownership. Governments may retain enterprises to manage services or infrastructure in sectors with natural-monopoly characteristics, pursue public-policy objectives, or maintain a presence in strategic industries. These purposes can overlap.
An SOE may have a public-service mandate while also selling products, earning revenue and operating commercially. State ownership also does not mean the company has no competitors: SOEs operate in contested markets as well as in areas with limited competition.
How can state ownership affect a company?
As an owner, the state may influence a company through shareholder votes, board appointments and other control rights. That influence can affect who sets strategy and how the company balances commercial aims with any public-policy mandate. The practical effects depend on the specific ownership arrangements and how the enterprise is governed.
A potential complication arises when government is both shareholder and policymaker or regulator in the same market. That overlap can create concerns about undue intervention or whether an SOE is treated differently from private competitors. It does not establish that every SOE receives an advantage, faces the same risks or performs better or worse because it is state-owned.
The OECD identifies governance practices that can help manage these tensions: clearly assigned ownership responsibilities, well-defined public-policy objectives, professional boards, disclosure and accountability. Fair competitive conditions also matter, particularly when public-policy responsibilities impose costs or bring advantages that private competitors do not share.
How significant are SOEs globally?
OECD figures show that state ownership is economically significant, but each figure describes a specific population or survey measure—not the proportion of all companies worldwide that are SOEs.
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| Measure | What the OECD reported |
|---|---|
| Public-sector ownership in listed companies | More than 25% of 2,037 listed companies worldwide, representing 11.6% of their total market capitalisation; OECD report published in 2024, reporting 2023 data. |
| SOEs among the world’s 500 largest enterprises by revenue | The number rose from 34 in 2000 to 126 in 2023; OECD, 2024. |
| Assets and revenue of those SOEs | USD 53.5 trillion in assets and more than USD 12 trillion in revenue in 2023; OECD, 2024. |
| Jurisdictions publishing annual SOE-sector reports | 64% of surveyed jurisdictions did so. Among those reporting jurisdictions, 37% provided comprehensive aggregate information on their full SOE portfolio; OECD, 2024. |
| Jurisdictions giving SOE boards full responsibility and autonomy for enterprise strategy | 67% of surveyed jurisdictions; OECD, 2024. This is a jurisdiction-level finding, not a share of individual SOEs. |
These measures describe scale and governance practices, not whether state ownership causes a particular company to succeed or fail. The OECD’s Ownership and Governance of State-Owned Enterprises 2024 provides the comparative reporting behind these figures.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to assess an SOE—or compare it with a private company
To understand how state ownership might shape a specific business, look beyond the label and examine the rights, responsibilities and market conditions involved:
- State ownership and control: Identify direct and indirect shareholdings, voting rights, board or executive appointment powers, and veto rights.
- Mandate: Establish which responsibilities are commercial and which serve public-policy objectives, and how those objectives are defined.
- Board governance: Check who appoints the board, how much autonomy it has to set strategy, and how it is held accountable.
- Disclosure and oversight: Review financial and non-financial reporting, audit information and any available reporting on the state’s wider portfolio.
- Competitive conditions: Consider the company’s competitors and how the costs or benefits of its public-policy duties are handled.
These factors help explain a company’s incentives and governance; by themselves, they do not rank its performance. A company-specific assessment also requires the relevant local law and company disclosures.
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