Internet giant Yahoo! has announced plans to move its European, Middle East and Africa (EMEA) headquarters from London to Geneva.
As US firms, in particular, internationalise their businesses, competition between Switzerland and London to become Europe’s pre-eminent location for global company headquarters is intensifying.
US human resources firm Kelly Services announced plans in March to locate its European headquarters in Switzerland’s Neuchatel. The low-tax canton’s multilingual environment, central location, transportation and communications infrastructure were all draws, said Kelly Services’ EMEA marketing chief Todd Wheatland.
Yahoo! employs 700 staff in the UK. It has not outlined how many jobs will be relocated to Geneva. The firm said the move was “part of its ongoing international strategy to increase competitiveness and deliver financial results, performance and efficiency”.
Speculation around Yahoo!’s decision is that the move was driven largely by Switzerland’s favourable tax administration. Swiss cantons set their own corporate tax rates. According to KPMG, the average rate is 21.3%, taking into account cantonal, municipal and federal taxes, compared with the UK’s 28%, prompting concerns for London’s future attractiveness for hosting European headquarters.
The news comes as a blow to UK prime minister Gordon Brown’s newly formed Department of Innovation, Universities and Skills’ technology strategy board, which aims to establish the UK as a global leader in innovation and a magnet for technology-intensive companies.
Yahoo!’s rival internet search firm Google has its European headquarters in London but chose to base its European engineering headquarters in Zurich.
In other sectors, food company Kraft announced plans last year to relocate its European headquarters from London to Zurich.
Although the loss of global firms has London’s investment authorities concerned, General Electric (GE) has announced the relocation of its consumer finance business from Connecticut to London, asserting the city’s dominance as Europe’s premier financial hub.
GE international president and chief executive Nani Beccalli-Falco said the move was based on London’s reputation as a financial centre plus the availability of financial expertise and talent.