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Moving Headquarters Overseas

In: Business and Management

Submitted By samanthatan
Words 1805
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Moving headquarters overseas has been a growing trend since the 1990s as more and more countries become open to the idea of relocation. In our case, we saw examples of big multi-national companies moving headquarters across continents, like Nokia moving from Finland to the United States, IBM from the United States to China and HSBC from London to Hong Kong. This report will examine the reason behind this phenomenon and what are the consequences as a result of that.

There are some key reasons that lead to this trend.

i) Moving closer to the Asian market

As Asia continues to charge ahead in its development, many companies want to fight for a slice of the pie and are moving into Asia to take advantage of the growing demand there. For example, Procter & Gamble (P&G) has this year moved its global headquarters for their beauty and baby-care business, including its biggest brand, Pampers, from Cincinnati to Singapore. They have expressed that the move to Singapore was motivated by a need for P&G brands to be closer to the growing number of consumers in Asia. As we can see from this, multi-national companies see the importance of the Asian market and believe that in order to take advantage of the potential there, need to relocate their headquarters. It is no longer enough to just have operations in Asia, but it is also helpful to have headquarters within the region to facilitate development.

ii) Moving away from heavy corporate taxes

The next trend is that of companies moving their headquarters out of countries that have heavy corporate taxes. This is extremely prevalent in the United States, with a recent Wall Street Journal article stating that at least 10 big local multi-national companies have intentions to relocate out of the country in the next year due to this. This is not a surprising choice for these big companies as heavy tax rates results...

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