Why is Shell leaving the Netherlands?

In 2020 Shell announced they are leaving the Netherlands. The oil company has been in Holland for 130 years and has recently decided they will be relocating their headquarters from Holland to England. Even though this seems like a big transition, the change has deeper roots and is not as bad for the Netherlands as it looks. But why exactly did Shell decide to leave the Netherlands?

Complicated

Shell states that the main reason for the big move overseas is to make their corporate structure less complicated. Before, the multimillion enterprise issued shares from both the United Kingdom and the Netherlands. The Dutch shares were called Royal Dutch Shell A and the British are called RDS B. The British RDS B remains, but the Royal Dutch Shell A disappears. By doing so, Shell wants to make the corporate structure less complicated, and this will allow for more ease for both the company as well as investors. Initially, Shell had to ask for permission when they wanted to issue more shares, with two groups of shareholders. By losing the Royal Dutch Shell A, only one group needs to be consulted (Niewold, 2021).

Dividends

Furthermore, when Brexit happened, having the company in two countries became even more complicated. It cost Shell much money to track differences in regulations between the two countries. When the UK departed from the European Union in 2020, companies had to make a pragmatic choice and based on the needs of the enterprise; they chose either the UK or the Netherlands. The enterprise chose to move to London for the headquarters because it already has a British company form. Moreover, in England, the company does not have to pay taxes on dividends, whereas in the Netherlands, this is 15 percent. Smaller companies are usually not hit by these dividend taxes, as many enterprises get an exemption or clearance (Npo Kennis, n.d.)

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For now, Shell’s decision does not mean that much to the Dutch economy. Most employees keep working in Holland, and the move does not influence oil prices (Sies, 2021). Thus, Holland remains to be a highly attractive country to relocate to.

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