10 Big U.S. Businesses That Have Moved Their HQ Abroad to Pay Less Taxes

http://www.focus.com/fyi/finance/10-big-businesses-that-have-moved-abroad/

by psogle • 17 years ago

15 19 17 years ago

ktharavaad• 17 years ago

Its kind of unfair that only big companies can get this sort of competitive advantage while smaller startups are stuck paying taxes through their nose under the draconian tax policies of the US government.

There should be a guide or services for smaller companies and Startups to incorporate in tax shelters so they too can enjoy the tax benefits and thus level the playing field with the big boys. Are there such resources around?

bwd• 17 years ago

These resources are called tax lawyers, and they are very expensive. The knowledge required to do this is very specialized and guarded with extreme zeal by its possessors. As is usual in any situation involving government regulation, the biggest winners are the lawyers. If you want to get an idea of how complex and draconian these things really are, try looking up PFIC and "controlled foreign corporation".

BrentRitterbeck• 17 years ago

There is nothing preventing you from moving to a country with more favorable tax laws, especially with a business based around the Internet. If your sentence was meant to reference money, well that's something every company goes through in the early stages. At that stage the best you can hope for is to turn a profit and get to the point where barriers to entry kick into effect.

daeken• 17 years ago

Look into the Belizean IBC (international business company) system. They provide easy registration (fully automated) and you pay nothing but a yearly fee. Belize has become a great location for basing companies, although dealing with banking can be a PITA.

patrickg-zill• 17 years ago

Yes it is unfair.

As an example, consider that no matter what interpretation of any tax law you get from an IRS employee, it will not hold up in court - if an IRS agent tells you to do A, then the IRS decides later to disallow A and that you should have done B, they will hit you up with taxes and penalties and you have no recourse.

UNLESS, you pay money for an IRS administrative ruling; then, you can use that response in tax court. The key is that the cost for such rulings are $50K. Each.

See: http://www.irs.gov/newsroom/article/0,,id=151979,00.html

jonursenbach• 17 years ago

Astonishing how so many companies are relocating to Bermuda and the Cayman Islands. The weather must be really nice there!

/sarcasm

cwan• 17 years ago

With taxes set to rise (and given the literally trillions of dollars of cumulative new deficits how can they not?), this is going to happen increasingly more. The unfortunate reality is that politicians heap blame on the "greed" of profitable corporations and wealthy individuals forgetting that these companies (and people) have the greatest ability to move abroad.

Going Galt anyone? Related article: http://finance.yahoo.com/banking-budgeting/article/107123/Mi...

jrockway3• 17 years ago

The "tragedy of the commons" in action. The infrastructure that enables their customers to buy their products doesn't come for free. But since they don't have to help pay for it, they don't.

It will all come tumbling down eventually.

dantheman• 17 years ago

It's not a tragedy of the commons. If you look at how actual money is spent there is plenty of money to cover all costs. Sales tax, gas tax, and property tax should be enough to cover the services that benefit the corporation. Now when the government is involved in all sorts of activities that in now way benefit the company -- non infrastructure/police/fire services, and a company wants to opt out by moving that's not a tragedy of the commons since they aren't externalizing any costs or exploiting any resources.

Some might argue that education, welfare, etc are beneficial to a corporation, but in reality they're not. They are to benefit the community -- the individuals receiving the output of those services. Of course a company requires educated people and if there aren't any available then they will have to develop schools to train their employees (something that has been done in the past).

jrockway3• 17 years ago

My point is, when everyone stops paying taxes, there won't be any educated people anymore. Each company will have to get into the business of training people, making the cost higher than not paying taxes.

Classic tragedy of the commons.

martythemaniak• 17 years ago

Yes, because Halliburton, Tyco and Accenture are the model corporate citizens...

jhancock• 17 years ago

We should treat companies that move overseas as dead to us. The estate tax on death is around 50%. Please pay as you leave.

gaius2• 17 years ago

It would be worth it.

quizbiz• 17 years ago

favorable tax laws != favorable business laws

To what extent will a government go to protect your investment/property? Are you big enough where the potential for loss is an acceptable risk? If so and your business is very liquid and global then I see no problem in having an HQ elsewhere. What do you care where their HQ is? Most likely, their investors are still collecting profits in the US. The saved money from taxes drives up equity, reinvestment, research and development. Am I crazy for not caring where a business is centered? I guess I don't watch enough Lou Dobbs.

sielskr• 17 years ago

To what extent will a government go to protect your investment/property?

My guess is that it is better for a business to be under a common-law jurisdiction. The legal system in most of the world is of a type called civil law, as contrasted to common law, but common law tends to protect property better because property is more central to its conceptual framework. Nick Szabo argues convincingly for the superiority of common law over civil law on his blog, http://unenumerated.blogspot.com.

One of Dubai's economic zones uses common law. (They hired a retired English judge to run the legal system in the zone.) added. Bermuda and the Cayman Islands use common law, too.

lsc• 17 years ago

for small companies, especially, the complexity matters as much as the rate. I know I've had months where I spent more money calculating the tax than I ended up paying in tax.

10 Big U.S. Businesses That Have Moved Their HQ Abroad to Pay Less Taxes

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