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Where should you flee Brexit too if you are a Capitalist Corporation?

Thursday, February 23, 2017 3:55
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So this is easier than you may think to decide. There are five major considerations that any company has to take account of:

Regulatory Environment, Tax, Employment, Language, EU exit potential

For the first, this is how seriously a country takes enforcement or regulatory rules and therefore how much time and effort you will have to put into pretending your company is operating there.

This is quite a hurdle, Ireland for example are saying you have to have significant operations in-country to count. This is not surprising, given how close to death Ireland came in the 2008 Financial crash.

What this means is that very few countries are able to offer the light regulation (this means a brass plate address a la the Cayman Islands). The EU Countries that do are Malta and Luxembourg. Neither of these places really wants large movements of people to them.

Of the other major Countries, Germany, Ireland, France, Holland, Iceland and Lithuania  offer a more challenging regulatory regime, but at least you could actually move people there. Here though both Employment and Language come into play. Ireland apart language is a real issue and notably in France employment issues too – not point being a capitalist company if you can’t sack the staff or only hire contractors. The employment element rules out most countries.

Then of course, France and Holland may exit the EU themselves, so why move there for only a temporary escape.

So when it comes down to it, there is only really Luxembourg, Malta and Ireland as serious places to go. Luxembourg ins hands down as many financial services funds are already domiciled in Luxembourg to pay no tax. of course, if you have actual people and business to move then there is Ireland but there regulations mean that is a long process that you really should have started already.

For how long though will the EU put up with Luxembourg offering its companies and UK companies a no-tax jurisdiction within the heart of the continent? Also, when the Financial Transaction tax hits, how much will that hurt the EU trading companies – why bother moving now only to come back later?

As a final thought, due to the above I fully expect to see Luxembourg and Malta veto any moves towards allowing UK passporting or other deals with the EU. They will push for hard Brexit all the way as for them it is a one-way bet.


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