The old name of the company will also disappear: Royal Dutch Shell. The royal appointment also ends due to this move.
According to Shell, the material consequences of the intervention are limited. Only CEO Ben van Beurden, CFO Jessica Uhl and ten senior managers are leaving The Hague for London. The Royal City maintains only the subdivisions and the Dutch branch of the company.
“I realize that today’s announcement represents a difficult message for many people,” Van Beurden said. “However, I would like to stress that simplifying our structure is essential to accelerate our strategy. This way we can play a leading role in the energy transition. We remain strongly linked to the Netherlands.
The Cabinet was informed of the transportation plan on Sunday. Economic Affairs Minister Steve Blok reacted “unpleasantly surprised” by the decision. “We are in discussions with Shell senior management about the consequences of this plan for jobs, critical investment decisions and sustainability. It is very important,” says Block.
Tax evasion
Shell has been officially a British company since 2005, but its head office and tax headquarters are located in The Hague. The Group was thus able to benefit from the broad tax bases that the Netherlands offers to multinational companies.
However, such constructions can also be used to keep the tax bill elsewhere as low as possible – sometimes even zero. Such “tax evasion” is legal, but is strongly criticized around the world because developing countries in particular lose income.
The Netherlands has gradually tightened its tax rules in recent years, so that the tax options available to companies such as Shell have become increasingly limited. The payment of bonuses to senior executives in the Netherlands has also been restricted, and the abolition of the profits tax, previously promised by Prime Minister Rutte to prevent the departure of multinational companies such as Shell, has been reversed.
Unilever
The government has always pledged that these measures will have no consequences on the attractiveness of the Netherlands for companies operating internationally. But in 2020, Unilever, a Dutch-British joint venture like Shell, decided to base itself exclusively in London. RELX, Elsevier’s predecessor, also did this in 2018.
Van Beurden has been hinting for more than a year that a row over profits tax, in particular, could lead to a move to London. Shell now denies that the relocation plans have anything to do with the tax climate. A spokesperson says: “London was chosen over The Hague because it is easier to transfer a tax headquarters than to transfer a legal entity.”
Through this intervention, Shell says it wants to better prepare for the energy transition, as the oil giant has promised to focus more on renewable energy sources. Research on this topic will be more focused in Amsterdam North, where Shell has operated one of its largest laboratories for a century.
Dirty and clean
According to Marianne van Loon, Director of Shell Netherlands, the intervention will not have any consequences for Shell’s activities and employment in the Netherlands.
“From the Netherlands, we are embarking on the most significant change that Shell has ever championed. We are driving our global research, development and production of renewable energy from The Hague and Amsterdam. And in Rotterdam and Moerdijk, we are building our European base for the production and trade of clean fuels and chemicals. Shell remains a major player in the Netherlands.”
Shell is also adjusting its share structure. The difference between two types of shares, each with different voting rights, will be eliminated. The company previously announced that it would buy a total of nine billion of its own shares, which could increase the value of outstanding shares. This action appears to be aimed at appeasing shareholders, some of whom recently suggested splitting the company into a “dirty” and a “clean” division, to interfere in the site’s politics.
‘Huge losses’
VNO-NCW hopes to retain Shell for the Netherlands. According to the Businessmen Association, the departure represents a strong blow to the economy and business.
“We are very disappointed that a company with a long Dutch history is leaving the Netherlands,” says a company spokesperson. “We recognize that Shell needs to be able to make decisions much faster regarding the energy transition and that a complex shareholder structure does not help this.” But according to the organization, this could have easily been done from the Netherlands.
“This is a big loss for the Netherlands. With Shell’s departure, the Dutch business climate is starting to deteriorate. After all, the presence of the head offices of major international companies attracts activity from all over the world. We hope that a solution can be found to keep Shell in the Netherlands.”
A broad association of 120 interest groups, economists and administrators called on politicians two years ago not to take too bold measures that would worsen the business climate in the Netherlands. He added: “These concerns still exist and we strongly repeat them.”
According to Melodydefense, the move has no consequences for the lawsuit against Shell over the group’s emissions reductions. “In any case, this case will remain before the Dutch courts,” says movement leader Peer de Rijk. “In our opinion, this will also have no consequences for future climate situations at home and abroad. The move to the UK is likely to open a new front.
