Vacuum entrepreneur Sir James Dyson says his decision to move his company headquarters to Singapore is being done to future-proof the business as he looks to diversify.
Dyson employee numbers by location, 2018
Weeks away from the UK’s expected departure from the EU, the decision by Dyson Ltd, which makes high-end appliances, to relocate its headquarters to Singapore has caused a stir, not least because its owner is a staunch advocate of Brexit.
Sir James said the move is designed to “future proof” the company and has played down the significance of the move, pointing out that only two executives are moving to Singapore at present.
But critics have pointed out the timing of the move could not have been more poignant, and the UK government was kept in the dark about the relocation.
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Corporation taxes in Singapore can be very low
Singapore is a highly desirable location for businesses as its government offers substantial tax incentives for companies that locate significant resources there. In some instances, the corporate tax rate can be zero for companies complying with a series of government requirements.
Dyson investment incentives effective tax burden reduction, 2016-2017
From 2020 the UK’s corporate tax rate will match Singapore at 17%, and while it is generally rare for companies to achieve a 0% tax rate, Sir James may achieve this by increasing the skilled worker headcount, investing in R&D and increasing expenditure.
The Dyson electric car is the real reason behind the move, as the company is positioning itself to compete against the world’s top electric vehicle manufacturers.
Sir James is about to embark on the biggest venture in the company’s history as it prepares to launch an electric vehicle into a market that it has no previous experience in.
Given the tough nature of the car industry, some observers believe that relocating its headquarters to Singapore will bring it closer to its manufacturing centres in Asia. Also, relatively relaxed financial disclosure rules in Singapore should help to protect the company during the initial, less profitable, phases of getting the car ready for market.
Dyson UK sales compared with the rest of the world
Disagreements over government control
The primary reason behind the move possibly is to take advantage of Singapore’s liberal regulatory demands regarding disclosure rules for privately owned companies. In the past, Sir James has been critical of the UK’s disclosure rules.
The business has always closely guarded its commercial information and the move to Singapore may help protect the company’s top secret new car designs from being poached by competitors, as is common in the automotive industry.
However, as far back as 2014, Sir James suggested the UK should leave the EU because of a ruling on vacuum cleaners that would affect his company, as the EU introduced rules to limit energy consumption. In 2018, Vsuccessfully appealed this ruling in court arguing that energy consumption labels were misleading due to an ineffective standardised testing procedure.