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FILE PHOTO: Filled oil drums are seen at Royal Dutch Shell Plc’s lubricants blending plant in the town of Torzhok, north-west of Tver, November 7, 2014. REUTERS/Sergei Karpukhin |
Royal Dutch Shellโs decision to move its corporate headquarters and tax base to London may win over shareholders but it has struck a blow to Dutch prestige.
As the energy giant crosses the North Sea, it will shed โRoyal Dutchโ from its name, ending a link to the monarchy in the Netherlands that began when the Royal Dutch Petroleum Company was formed in 1890.
Even after a tie-up with Britainโs Shell Transport and Trading Company in 1907, while the rest of the world knew the merged firm as โShellโ, most Dutch still referred to it as โKoninklijke Olieโ or โRoyal Oilโ.
Its formal name will now become Shell Plc โ if changes to the dual share structure and other plans are approved.
The Dutch government said it was โunpleasantly surprisedโ by the decision, as the country counts the cost of losing another Anglo-Dutch multinational to London after a similar move by consumer giant Unilever (ULVR.L) last year.
Britain, which has watched billions of euros in share trading move to Amsterdam since its departure from the European Union, called Shellโs move a โvote of confidenceโ.
Frank van der Vorm of Royal Branding, a company which advises organisations in the Netherlands on how to obtain the โRoyalโ title, put a brave face on Shellโs move.
โTheir reputation had already come under pressure due to the global focus on fossil fuels,โ he said. โItโs losing its shine.โ
Only 150 companies out of 600,000 in the Netherlands had been awarded the โRoyalโ title, he said, which was viewed as sign of longevity and pre-eminence in their field of business. โIt will mainly be a loss for Shell itself,โ he said.
Others were less sanguine.
โWith a Shell departure, the Dutch business climate is worsening,โ the Confederation of Netherlands Industry and Employers (VNO) said, calling the departure of Shell an โenormous bloodlettingโ for the Netherlands.
Its decision to move its tax residence out of the Netherlands may have only a modest direct impact on state revenues โ Shell said it paid $212 million to the Dutch authorities in 2020 compared to its global corporation tax bill of $3.4 billion.
Shell also sought to soften the blow on Monday, saying only a handful of management posts would move to London.
But it may raise other concerns about business in the Netherlands. Both Shell and Unilever had lobbied the Dutch government to scrap a dividend tax that Britain does not impose.
Prime Minister Mark Rutte, who began his career at Unilever, tried unsuccessfully to have the tax scrapped. He had warned that multinationals could leave as a result.
Shell had also come under pressure in the Netherlands from climate activists. It is appealing a Dutch court decision in May ordering it to move more quickly to reduce carbon emissions.
REUTERS