There have been a significant number of high-profile transactions where UK tax resident companies have become new holding companies of multinational groups. In 2013, LyondellBassel Industries NV (market capitalization: $49 billion) moved to the UK, and Fiat Industrial and CNH Global merged and established UK residence. In 2014, Fiat, Chrysler, Omnicom, and Publicis announced similar transactions.
 
The UK has established itself as a very attractive holding company jurisdiction. Various changes to the UK rules (e.g., exemptions for dividends received, amendments to UK CFC rules) and existing features of the UK (no withholding tax on dividends, wide treaty network) make it a favorable environment in which to operate. Just as important, UK company law is flexible and familiar for common law jurisdictions. A number of these transactions have used EU style mergers to redomicile the company for corporate law purposes. Although the UK does not have a domestic merger regime, it has adopted legislation to confirm with the EU mergers directive, which allows UK companies to merge into EU companies or vice versa. We would expect more of these transactions to be announced in the future. Significant acquisitions/mergers provide a compelling rationale for redomiciliation, especially where neither of the companies involved wants to be perceived as becoming a subsidiary of the other, and both would prefer to find a neutral third party jurisdiction.

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