For the second time in five years, oil giant Noble (NYSE:NE) wants to pick up stakes and move. It announced today that its board of directors approved a move from its current location in Switzerland to a new home in the United Kingdom. The move would need to be approved by shareholders. In 2008, the Houston-based driller had been incorporated in the Cayman Islands and moved to Switzerland to take advantage of preferential tax treatments there.
While Noble President and CEO David W. Williams said the switch is because the U.K. is "as an international business and travel center, coupled with its well established tax regime, (that) will help us to maintain our competitive position in the global marketplace and manage our geographically dispersed operations," perhaps it's no coincidence that Switzerland announced several months ago it was making changes to its corporate tax rules.
While the country said those changes were to make its tax laws more attractive to business, the European Union has complained about how foreign and domestic companies are treated differently when it comes to taxes. Many of Switzerland's cantons operate a dual tax structure, though Zug, where Noble is based, does not. As of 2011, it had a low average corporate rate of 13%, according to Bloomberg.
If shareholders approve the change in where Noble is domiciled, a new U.K. subsidiary will merge with the Swiss one and take over operations. The company's stock will continue to trade on the NYSE under the symbol NE. Noble will maintain a presence in Zug, Switzerland, to support its activities there and otherwise doesn't plan to see any change in its day-to-day operations.
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