BDO, 55 Baker Street
55 Baker Street, London
|Date of event:||24 November 2015|
|Event ends:||24 November 2015|
The Business Forum
Globalisation has meant that firms are increasingly footloose, adjusting their physical and legal presence rapidly from one country to another to take advantage of the best incentives and infrastructure. From the policy maker’s point of view, this flexibility can be problematic. Not only is investing in infrastructure costly, but globalisation also severely reduces the state’s ability to generate revenue by taxing multinational corporations. Some regard this state of affairs to be unsustainable in the long run.
The UK is at the heart of this phenomenon; and London, where so many multinational corporations have a large presence, is particularly affected. From the firm’s perspective, we want to know: How easy is it to function as a ‘global’ firm? How much mobility do firms really have, in shifting their fiscal and tax base? From the government’s perspective, we want to know: How significant is this problem? How might it best be addressed?
This event features a distinguished panel comprising:
Chair: Professor Ginny Gibson, Deputy Dean of the Henley Business School
Professor Rajneesh Narula – The John H Dunning Chair of International Business and Professor of International Business Regulation, Henley Business School
Paul Brundage – Executive Vice President, Senior Managing Director, Europe, Oxford Properties
Ashley Carter - Principal, Global Outsourcing, BDO
Malcolm Joy - Partner, International Tax, BDO
Mark Smith - Business & Corporate Development Lead, Ticketmaster International
Detailed description of themes to be explored
Conventional wisdom has it that businesses are increasingly multinational in their nature. Globalization has provided immense opportunities over the last two decades for businesses to internationalise their operations outside their traditional ‘home’ markets. There are few companies today that do not depend upon foreign suppliers and customers, even if this has also meant greater competition from overseas rivals. Indeed, for a number of such firms, it is hard to determine their nationality, with activities in a variety of places, either to benefit from tax laws, to be close to their largest customers, or to seek resources, including capital. Many firms are simultaneously listed on several stock markets.
With a complex set of overlapping holding companies and ownership structures, the modern multinational firm has ‘fuzzy boundaries’. Nationality of firms has become hard to determine: is this where the HQ is? Where their largest operations are? By the nationality of the majority of the board? Where the majority of their employees are located? Where they pay their taxes?
Nation states – especially European ones - also have fuzzy boundaries, not only because firms and people move relatively freely across borders, but also because they are simultaneously bound by European law and a variety of binding international agreements that oftentimes supersede national regulation. However, by and large, they remain sovereign in the sense that they are rarely able to enforce their authority outside their national borders. The benefits of globalization in this regard have been uneven.
This uneven relationship has severe consequences for countries. They need to remain competitive to attract jobs and investments, and to do this they must provide the physical and knowledge infrastructure that companies need. However, their capacity to pay for this is impaired by their ability to generate revenues, as firms are increasingly able to exploit their network of subsidiaries to efficiently manage their tax burden. The footloose firm creates a variety of other welfare challenges for governments. How do they enforce monopoly laws, and anti-competitive behaviour outside their national jurisdiction? How will states pay for public goods, if they do not have the revenues to finance them?
This Buisness Forum will visit both sides of this growing paradox. The UK is at the heart of this phenomenon, and London in particular, where so many multinational corporations have a large presence.
From the firm’s perspective, we want to know: how easy is it to function as a ‘global’ firm? How much mobility do firms really have, in shifting their fiscal and tax base? How mobile are firms really? Is there such a thing as a virtual or networked firm?
From the government’s perspective, we want to know: how significant is this problem? How might it best be addressed?
55 Baker Street, London