PayPal drew a line in the sand when North Carolina enacted a law prohibiting people from using the restrooms of the opposite sex, but critics say that line got washed away on the shores of Malaysia, a nation that consistently ranks among the least LGBT-friendly in the world.

The company canceled its plan to build a global operations center in Charlotte after the passage of HB2, which CEO Daniel Schulman called discrimination against the transgendered. He noted that the move would cost North Carolina 400 well-paying jobs.

But Malaysia’s Penal Code 187 — which punishes homosexual conduct with whippings and up to 20 years in prison — did not stop PayPal from opening in 2011 a global operations center there that it estimated would employ 500 workers by 2013.

“We chose Malaysia because of its highly skilled, globally competitive and multilingual workforce, in addition to a world-class business environment and technology infrastructure,” John McCabe, senior vice president for global operations, said at the time.

But PayPal is not an isolated corporation, nor is Malaysia an isolated country.

Whether it’s Apple opening stores in Saudi Arabia or American Airlines looking to dominate the Cuban travel market, many of the companies that have threatened to cut business ties to North Carolina over its bathroom bill are eager to do business in countries with regimes far more repressive of gays (and everyone else).

PayPal’s international headquarters are located in Singapore, where sexual contact between males is punishable by up to two years in prison, and even littering can be punished by flogging. The company has a software development center in Chennai, India, where same-sex marriage is prohibited.

Matt Sharp, legal counsel for the Alliance Defending Freedom, said PayPal’s actions internationally speak louder than its words at home.

“They’ve got a political agenda that they’re trying to push in the U.S. But it definitely does not line up with what their actions are saying around the world in places like Malaysia and others,” Mr. Sharp said.

Apple is among the other major corporations that have taken to the pulpit to lecture North Carolina for its sins despite doing business with anti-gay foreign regimes. CEO Tim Cook was one of several high-profile tech CEOs who signed a letter to Republican Gov. Pat McCrory calling on him to repeal the legislation.

“We are disappointed in your decision to sign this discriminatory legislation into law,” the letter reads. “The business community, by and large, has constantly communicated to lawmakers at every level that such laws are bad for our employees and bad for business.”

But, as Mr. Sharp points out, that has not stopped Apple from opening stores in Saudi Arabia, where gay people are regularly executed in public and cross-dressing is also a criminal offense. Pro-gay and trans advocacy are illegal, as is every religion except Islam.

“We’ve seen the same thing with Apple and some of these other companies that are fine doing business in Saudi Arabia and other countries that are extremely oppressive of the LGBT community,” Mr. Sharp said.

North Carolina Rep. Robert Pittenger noted that PayPal also provides its payment services in countries where restrooms are the least of the transgender community’s worries.

“PayPal does business in 25 countries where homosexual behavior is illegal, including 5 countries where the penalty is death, yet they object to the North Carolina Legislature overturning a misguided ordinance about letting men in to the women’s bathroom?” said Mr. Pittenger, a Republican, in a statement. “Perhaps PayPal would like to try and clarify this seemingly very hypocritical position.”

‘No comparison’

If PayPal is worried about the well-being of its gay employees and customers, then Malaysia may not be the best place to set up shop.

The 2013 Spartacus Gay Travel Index, which rates the “most dangerous countries for homosexuals to visit and live in,” ranked Malaysia the 142nd-least-gay-friendly nation in the world — tied with countries such as Nigeria, Kenya and Pakistan.

A spokeswoman from PayPal did not respond to questions about how anti-gay laws in Malaysia affected the company’s decision to build an office there. But she said PayPal’s canceled expansion in North Carolina reflects the company’s “deepest values and our strong belief that every person has the right to be treated equally, and with dignity and respect.”

“These principles of fairness, inclusion and equality are at the heart of everything we seek to achieve and stand for as a company,” the spokeswoman said. “And they compel us to take action to oppose discrimination.”

Responding that there’s “simply no comparison” between the laws in North Carolina and Malaysia, Mr. Sharp said PayPal should take action to oppose discrimination abroad, as its domestic rhetoric calls those values a central component of its corporate mission.

“If they are serious about this, I think they ought to be pressuring some of these international countries that they’re working in to provide real protection against punishment and imprisonment that’s happening in other countries,” Mr. Sharp said. “Especially internationally, they’re focused on the money.”

Free markets, free people?

Deena Fidas, director of the Human Rights Campaign Foundation’s Workplace Equality Program, said PayPal’s approach to gay rights abroad can help the plight of gays and the transgendered.

“Businesses are going to be making strategic decisions based on a variety of factors, and the fact that they’re not ceasing operations in other locales doesn’t diminish this very important moment where they’re sending a very clear message,” Ms. Fidas said.

“The reality is that right now, at any given moment, businesses are expanding in locales that have some problematic laws on the books for the LGBT community,” she added. “But what we’ve found is the private sector can be a bastion in an otherwise unwelcoming climate.”

A lot of expanding into locales that offer gays an unwelcoming climate is occurring among corporate critics of North Carolina’s bathroom bill.

A spokeswoman for American Airlines, which has its second-biggest hub in Charlotte, called such laws “bad for the economies of the states in which they are enacted.” And the National Basketball Association, which has scheduled next season’s All-Star Game for Charlotte, said it is “deeply concerned that this discriminatory law runs counter to our guiding principles of equality and mutual respect.”

However, both corporations are eager to do business in China — American operates flights to Beijing and Shanghai; the NBA played two exhibition games in China before this season and will play two more this fall in the basketball-crazy country.

In addition, earlier this spring, American Airlines made clear that it plans to use its Miami hub for business in communist Cuba, petitioning for 12 of the 20 available daily flights to the Cuban capital and requesting flights to five other Cuban cities.

China, Cuba anti-gay laws

While neither China nor Cuba criminalizes homosexuality as a form of bourgeois decadence, as each did during the Cold War era, gay rights are severely limited.

Both nations have constitutional provisions defining marriage as the union of a man and a woman, a holy grail far beyond what America’s religious conservatives can hope to pass in 2016.

In both countries adoption by gay couples is banned, and anti-discrimination laws operate on the basis of sex, race, religion and other categories but do not protect the transgendered. Cuba’s anti-discrimination laws do cover gays, but only in some fields.

Also, both countries are still officially one-party dictatorships that routinely arrest and beat anti-government protesters, limit the activities of dissidents and restrict depictions of homosexuality.

The official China Television Drama Production Industry Association posted new regulations stating that “no television drama shall show abnormal sexual relationships and behaviors, such as incest [and] same-sex relationships.”

Some “progress” does happen though.

In 2010 Malaysia’s Film Censorship Board revoked a ban on depicting gay people in movies — but under the stipulation that the films “portray good triumphing over evil and there is a lesson learned … such as from a gay [character] who turns into a [straight] man.”

When asked by The Washington Times for comment, American Airlines responded with a statement that criticized discrimination against gays and with a link to a statement last year extolling its high Corporate Equality Index rating from the Human Rights Campaign.

Neither statement addressed the question about its business ties to China and Cuba (or even mentioned either country by name) or their consistency with what American says are its values.

Spokespeople for Apple and the NBA did not immediately respond to requests for comment.

But if the marketplace can alleviate the plight of minorities around the world — as some laissez-faire economists have argued and Ms. Fidas says — then are American, the NBA, PayPal and others doing gay and transgendered people in North Carolina a disservice by threatening to curtail business activities in that state?

“The push-pull is that businesses can both leave in the face of lagging lawmakers, and they can also blunt the force of some of these anti-LGBT bills” by staying, Ms. Fidas said.

But Mr. Sharp’s interpretation was less generous. He said the business community’s reaction in North Carolina is just the latest example of corporate hypocrisy — pointing out the speck in the eyes of other Americans while ignoring the planks in their own.

“It’s sort of two-sided — one set of rules for the United States and another set of rules internationally,” he said.

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