Why the U.K. is attracting U.S. firms

Alisa Roth Nov 10, 2009
HTML EMBED:
COPY

Why the U.K. is attracting U.S. firms

Alisa Roth Nov 10, 2009
HTML EMBED:
COPY

TEXT OF STORY

Steve Chiotakis: Oil drilling company, Ensco International, says it’s moving its headquarters from Dallas to the United Kingdom. It’s all about getting closer to customers. And better taxes. So what, you say? Marketplace’s Alisa Roth explains.


Alisa Roth: If your company has its headquarters here in the U.S., Uncle Sam wants a piece of the profits. No matter where you make that money. But the United Kingdom just switched from that worldwide taxation to a territorial system. So if your company is based there, you only pay U.K. taxes on money you earn in the U.K. Then if you earn money in France, you pay French taxes on it, and so on.

Roseanne Altschuler is a director of the Urban Brookings Tax Policy Center.

ROSEANNE ALTSCHULER: The U.K. may not have looked attractive as a headquarter location as a worldwide country, but now that they’ve gone territorial, they may be just attractive enough to get the U.S. corporations to move there.

And she says once companies move their headquarters abroad, other operations may follow. She says it’s hard to know how much tax revenue would be lost if American companies started moving abroad en masse. And there is a law that makes it hard to leave just to avoid American taxes.

I’m Alisa Roth for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.