Corporate Migration, June 2013

Multinational groups continually review their position in terms of optimal location for operational and fiscal purposes. Current holding structures may appear under threat by recent announcements against perceived offshore tax havens. The possibility of the taxation of foreign profits or the imposition of withholding tax on payments has come to the fore and many corporate groups with a parent company incorporated in countries like Bermuda or the Cayman Islands have migrated to other jurisdictions to locate their top holding company in a jurisdiction that has a good network of tax treaties and trade agreements. A migration may also be efficient for groups located in jurisdictions with overly complex tax systems, including strict controlled foreign company (CFC), transfer pricing, thin capitalisation and other rules that add to compliance costs. For example, migration will generally be beneficial for a UK corporate group which has low taxed non-UK profits or significant