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Shell is considering moving its head office

English translation of an article published 4 July 2020 by the FD: Bert van Dijk

Shell is considering moving its head office

It is uncertain whether Shell wants to keep its headquarters in the Netherlands, now that a controversial plan by the cabinet to abolish dividend tax has been definitively off the table. That says Shell CEO Ben van Beurden in an interview with the FD.

The energy giant is a British company, but has its headquarters in The Hague. Shell chose this construction on the assumption that dividend tax would be abolished, says Van Beurden. In October 2018, the government withdrew this intention after public pressure. As a result, Shell looks at its current British-Dutch structure with different eyes, according to the CEO.

A possible departure from Shell, for which, according to Van Beurden, there are no concrete plans, would mean that two of the largest companies in the AEX index remove their headquarters from the Netherlands. A month ago, Unilever, a multinational with the same British-Dutch roots, announced that it would move to London, although the company denies that the dividend tax is related to this.

VNO-NCW leader Hans de Boer immediately warned about the psychological effect of Unilever’s intended departure. More companies would start thinking about this, such as Shell.

“Nothing is permanent”

Van Beurden does not want to explicitly say whether the oil company will move its headquarters like Unilever. “You should always keep thinking. Nothing is permanent and of course we look at the business climate. But moving your headquarters is not a trivial measure. You shouldn’t be too easy on that. ”

The retention of international headquarters was an important reason for Prime Minister Rutte to argue in favor of the abolition of dividend tax. Otherwise there would be a life-threatening risk ‘that some of the largest Dutch companies will leave. That is really an impoverishment of this country, “said the prime minister.

Dual structure

The problem for Shell is that with its current structure it has two types of shares. This has to do with the different tax regimes. In the United Kingdom, dividend tax has been zero for years. The double share structure has limitations, for example for issuing and buying back shares and when making acquisitions.

Shell wants to get rid of that dual structure, says Van Beurden. “It is not an acute problem at the moment, but it is a limiting factor for us.” He gives the acquisition of gas company BG in 2016 as an example. Due to complications with the Dutch tax authorities, Shell had to issue a new type of share for the old BG shareholders.

“You can solve all that, but at some point those constructions that you have to use for the fact that you have a dual share structure, or now even three types of shares, become more and more complicated and they limit your freedom,” says Van Beurden. “If that becomes too acute, you will have to do something. That is not currently the case, but it is a problem that I would rather have solved. ”

Shell says it has been talking to the Dutch government about this problem for fifteen years. Now that the dividend tax has been abolished, Shell is investigating other solutions. “We’re working on that.”


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