By Matthias Bau··Modified:
from right to left
There was no turning back: Shell’s headquarters had moved to London, and management and all shareholders of the company had voted overwhelmingly in favour of the plan.
The company just announced that more than 99 percent of votes cast were in favor of the move. That percentage may change slightly as final voting begins, but it’s not enough to change the outcome.
Last month, Shell announced that it would move its headquarters to the UK. Until now, Shell had a complex corporate structure, and it wants to get rid of it.
Since the merger between the British Shell and the Dutch Koninklijke Ole in 2005, Shell has had two types of shares (Dutch and British). Moreover, on paper it is a British company, with its head office in the Netherlands, which in turn is located in the Netherlands for tax purposes.
In addition, Dutch shareholders have to pay dividend tax – a tax on dividends paid by a company to shareholders – and because of the controversial structure, this is not necessary for British shares. It’s all hopelessly complicated. According to Shell, this structure hampers the company’s flexibility.
Easier to do business
The simplified corporate structure, with a single pool of shares and a UK headquarters, makes it easier for Shell to raise money by issuing new shares. It is also much easier to make acquisitions.
Buying stock, which is what companies do to please their shareholders, also becomes much easier with a single share class. Now it’s complicated: when you buy a single share Some profits are taxed, while others are not. Shell has wanted to get rid of this for many years.
Profits Tax
As a wholly British company, Shell is entirely free from all the fuss over the dividend tax, which it has been lobbying against in the Netherlands for years. In the UK, the tax does not exist at all. In a last-ditch effort to keep Shell, the cabinet last month questioned whether there was policy support in The Hague To quickly eliminate the profit taxBut soon Which turned out to be a hopeless mission..
Shell denies that the dividend tax itself is the reason for the move, but the complex structure it now wants to get rid of is a direct result of that dividend tax.
Definitely not Dutch
This dividend tax was clearly cited as a reason not to make Shell a fully Dutch company, which of course would have been an option to structure the company more simply.
“This would ensure that shareholders who currently own Shell shares would suddenly have to pay that extra tax,” said chief financial officer Jessica Ohl. “That was not an option.”
Early 2022
The exact date for this move has not yet been determined, but the company announced that it should take place in the first three months of 2022.
