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Each nation has a capital territory. This territory determines the soverignty of the nation. A nation whose capital is occupied does not generate economic credits and can't purchase new units. The capitals for each nation are listed here.
When a nation captures the capital of one of its enemies, it gets any leftover credits held by that enemy during that turn. In contrast to "Axis & Allies", a nation not in control of its capital generates no economic credits, so no other economic transfer takes place between the conquered and the conquerer. On the turn during which the capture takes place, the conquered nation forfeits all purchases that were ordered during the Orders phase.
To win, the Allies team must capture both Axis capitals. The Axis must capture two of the three Allies' capitals. Alternatively, the Axis win if their combined economic strength is greater or equal to a configurable minimum (usually 84 credits) at the end of the turn.