What’s The News?James Dyson, the billionaire inventor, and vacuum cleaner tycoon announced shifting the headquarters of his company from the U.K. to Singapore. Click To Tweet
What Does This Mean?
The company’s decision to move to Singapore was not due to the city-state’s zero tax appeal.
The corporate tax in Singapore is 17% compared with 19% in the UK.
Dyson’s Chief Executive Jim Rowan said the move has “nothing to do with Brexit” or tax, it’s about “future-proofing” the business where we see biggest opportunities. There are huge revenue opportunities in Singapore, and China is the poster child of that.”
The firm said in a statement:
“An increasing majority of Dyson’s customers and all of our manufacturing operations are now in Asia; this shift has been occurring for some time and will quicken as Dyson brings its electric vehicle to market.
Dyson already employs 1,100 people at its Singapore office, where it plans to double the size of its research and operations. It will also expand its capacity at the Singapore Technology Centre at Science Park.
Why Does It Matter?
The Bigger Market Picture: Dyson announced the move alongside its full-year results for 2018, as it reported that profits broke the £1bn barrier for the first time.
Dyson has been a staunch Brexit supporter since before the 2016 vote on EU membership. He said Britain could be about 18.5 billion pounds better off each year if it left the European Union.
However, his decision to register Dyson as a Singapore company rather than a British one has been seen as “betrayal of the public” in the UK.
Conservative MP Sam Gyimah and others took to Twitter to protest the decision.
“Dyson’s decision to move his HQ to Singapore reflects his narrow business interest. This is not just a transfer of two people. When HQs move, so does the intellectual property. Betrayal of the public who put their faith in him as a British business advocating a No Deal Brexit,” said Gyimah on Twitter.
Dyson already has a presence in Singapore. In October 2018, the company said it would build its electric car in Singapore as it was close to suppliers and Asian markets for the vehicle which is due to launch in 2021.
By making Singapore it’s home base, Dyson stands to take advantage of the free trade agreement between Singapore and the European Union, established last year.
Chief executive Jim Rowan added, “We have seen an acceleration of opportunities to grow the company from a revenue perspective in Asia. We have always had a revenue stream there and will be putting up our best efforts as well as keeping an eye on investments.”
The bombshell news that one of Britain’s most successful manufacturers is preparing to move its headquarters out of the UK comes at a rather sensitive time for international businesses based in the country.
Several other car makers including Nissan, Ford, and Toyota are also planning to cut UK manufacturing with the rising prospects of a no-deal Brexit which would further put their operations at risk in Britain.
Sir James Dyson’s decision to choose Singapore over Britain is less about how Brexit will affect Britain’s competitive advantage but more about how the world’s economic and technological focus is decisively focusing toward a stronger Asia.
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