| Shire quits UK to escape tax regime |
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| Written by Adrie van der Luijt | |
| Tuesday, 15 April 2008 | |
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Britain's third largest pharmaceutical company, Shire, is moving its base to Ireland.
The move will result in the FTSE 100 firm paying considerably lower taxes over its $2.44bn annual revenue, with Ireland's 12.5 per cent corporate tax rate winning hands down from the UK's 28 per cent rate. Under the proposals a new Jersey incorporated holding company will be tax resident in Ireland. Basingstoke-based Shire claimed that there would be no further consequences for its UK operations and that none of its employees would move to Ireland. The new holding company will have its primary listing on the London Stock Exchange and its American Depositary Shares (ADS) will be traded on NASDAQ. Through a series of transactions over the last ten years, the Shire group’s business has been transformed, from a primarily UK business to an international business, with the vast majority of its revenues generated from outside the UK. Last year 10 per cent of its revenue came from the UK, 75 per cent from North America and 15 per cent from other regions. Shire said in a statement that it had concluded that its business and its shareholders would be better served by having an international holding company with a group structure that is designed to help protect the group’s taxation position, and better facilitate the group’s financial management. "The directors believe that the most appropriate structure is for the new group parent company to be tax-resident in the Republic of Ireland," according to the statement. The new holding company, which is to be called Shire Limited, will have the same board and management team as Shire and the company said that there would be no substantive changes to corporate governance and investor protection measures. Shire Limited will issue Shire Limited ordinary shares to holders of Shire ordinary shares on a one-for-one basis. Provided shareholders agree to the move, the new structure would come into force from 23 March. Related articles
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