Royal Dutch Shell has announced a plan to move its headquarters to the UK as part of proposals to simplify the company’s structure.
The oil giant will ask shareholders to vote on shifting its tax residence from the Netherlands to the UK.
It also wants to do away with its dual share structure in favour of just one class of shares to boost “the speed and flexibility” of shareholder payouts.
Shell’s chief executive, Ben van Beurden, will relocate to the UK.
The company’s chief financial officer, Jessica Uhl, will also move, alongside seven other senior employees.
Business and Energy Secretary Kwasi Kwarteng welcomed Shell’s announcement , tweeting that it was “a clear vote of confidence in the British economy”.
The Dutch government, however, said it was “unpleasantly surprised” by Shell’s proposal.
According to reports in the Financial Time newspaper, Dutch government officials are scrambling to find a parliamentary majority to scrap a 15% withholding tax charged on dividends, which Shell has previously described as a problem.
Stef Blok, economic affairs and climate minister, said earlier on Monday: “We are in a dialogue with the management of Shell over the consequences of this plan for jobs, crucial investment decisions and sustainability.”
Royal Dutch Shell’s structure is pretty complicated. The company is currently registered in the UK, but its headquarters are in the Netherlands.
There are two different types of shares – effectively a Dutch share and a UK share – and this affects the way payments to shareholders are taxed.
Now, under pressure from an activist investor, and facing huge change as the world moves away from fossil fuels, the company has decided it is time to simplify further. The move is designed to make payments to shareholders easier, while Shell says it will also help it to transform its business.
But whether intended or not, this is also a deeply political move. If the proposals are adopted, Shell will no longer be “Royal Dutch” – and questions are being asked in The Hague about the extent to which the new company will be Dutch at all.