Business relocation and associated restructuring can deliver significant commercial, operational and tax management benefits. And it isn’t just large multinationals who are on the move, many smaller and privately-owned companies are now realising the potential gains.
As the focal points of global demand and talent shift South and East and the pressure to minimise costs and improve operational efficiency continue to mount, the rationale for relocation is becoming ever more compelling.
Even if you haven’t yet considered the options, you’re likely to face probing questions from analysts and investors about how the various relocation options compare to your current structures and whether you could be losing ground to competitors as a result of not making a possible move. So how can relocation add value?
It’s important to ensure that key operations and decision making are aligned with where you see the biggest opportunities for investment and growth. Many internationally mobile employees will want to gravitate towards the main focal points of growth. Shifting demographics and changing labour costs also mean that you may need to seek out new sources of talent.
Relocating to an offshore location can generate significant operational and administrative efficiencies, which could be critical as margins come under pressure in slow growth markets.
Many countries are imposing more complex compliance regimes. This is creating a huge burden for groups and is arguably accelerating the migration of businesses away from some of these markets.
Many governments are adjusting their tax regimes to help encourage companies to relocate and create jobs within their markets. Particular areas of focus include IP management and other high-value functions.
The choices that emerge from these evaluations may prove very different from what you originally envisaged. While these assessments are likely to identify a number of challenges, most can be managed with
the right structuring and planning. What you cannot afford to do is simply consign relocation to the ‘too difficult pile’ as you could lose out to competitors as a result.
