Panasonic Plans Relocation
Media outlets report that the Japanese electronics manufacturing company, Panasonic, is relocating its Europe headquarters to the Netherlands. A company spokesman reportedly confirmed on Thursday that the company had plans to move its headquarters from the current location in London down to Amsterdam. This relocation plan is ahead of UK’s 2019 Brexit. The spokesperson, however, refused to provide additional details about the headquarters relocation plan.
The company is popular for the manufacturing of household gadgets such as televisions. It is, however, also a major batteries supplier to Tesla. The chief executive officer of Panasonic Europe, Laurent Abadie reportedly told a media outlet that the company was making efforts to avoid the potential tax liabilities likely to result from Britain’s exit from the EU.
Abadie also added that the company was worried about the potential restrictions which would be placed on the movement of goods and people between Britain and other European countries.
Abadie stated that the relocation would take place in September and added that the company had been contemplating the relocation move for the last fifteen months. He highlighted that Panasonic has about two dozen employees in the UK, but he added that not all the employees would be moved. Abadie noted that the company could begin to regard the United Kingdom as only a tax haven in a case when the country proceeds to reduce its existing corporate rate.
It will be recalled that the Japanese government earlier warned that there was a high probability that its companies could relocate their business out of the UK to a different location in Europe after the UK Brexit move. Other Japanese companies that are massively invested in the UK include Toyota, Nissan, and Honda.
Other Companies’ Relocation
Britain is reportedly due to exit the European Union come March 2019 and Panasonic is allegedly not the only company making relocation plans. Sources claim that several companies that are based in the UK are already making concrete plans for the protection of their position with regards to future access to the European Union markets. This is because there is a high likelihood that Brexit would lead to new restrictions on the trading of goods and services.
Earlier in the year, BMW warned that the border delays could cause it to shut down the factories in the UK. Similarly, reports indicate that Deutsche Bank has relocated core parts of its business in Europe to Frankfurt. Also, Airbus also warned earlier this year that UK’s exit of the EU in the absence of concrete trading arrangements deal would drastically affect the aircraft maker’s production as well as threaten the future of its business in the UK.
Review of Corporate Rate
It will be recalled that the UK government has already hinted that it would put in efforts into making the country highly attractive to businesses as soon as it exits the EU trading bloc. The United Kingdom’s Prime Minister in 2016 announced the review of its corporate tax rate highlighting that there could be a move to considerably reduce the rate to make it lesser than the current rate of 20%. George Osborne, the former chancellor, also reportedly pledged to reduce the rate below 15%.
Almost simultaneously with the announcement of the review of the corporate rate, the Prime Minister allegedly launched series of measures that are focused on business in a bid to reduce the fears and concerns rising in the wake of Brexit. However, sources have noted that a cut in rate isn’t particularly friendly to all kinds of businesses. Panasonic is reportedly concerned that if Japan deems the UK to be a tax haven, it could also face some taxes liabilities back in Japan. As such, ensuring that its headquarters to remain within the EU eliminates such a risk.
Whether or not a deal will exist between the United Kingdom and the European Union post-Brexit currently remains unknown. That reportedly accounts for why several businesses are preempting the likely outcomes and making relevant decisions based on the potential outcomes.