The country list is a where you can control which countries appear in to your users during checkout. This is how you limit your store down to only certain regions or countries for orders.
Learn how to enable your country and states/provinces so you can only sell to certain regions and sections with your WordPress shopping cart.
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The country setup is critical for some payment providers gateways and shipping API systems. Be sure to enter a name and the correct 2 digit and 3 digit ISO code for your country that is recognized world wide. You may choose to have a sort order if you want a particular country to be listed first in the checkout country selection boxes.
Special Note: If you are going to use VAT by country, then this is the location to enter individual country VAT rates as a percentage.