By Vanessa Houlder
Published: June 20 2006 03:00 | Last updated: June 20 2006 03:00
No company wants to risk a serious blow to its share price. So one of the main concerns for a big company considering moving its headquarters overseas is how to avoid the risk of falling out of the widely-tracked FTSE 100 index.
This issue shaped the decision of Royal Dutch Shell to opt for a parent company that was incorporated in the UK but had Dutch headquarters and tax residency when it embarked on its radical restructuring to create a single parent company in 2004. It informed shareholders: “The steering group was advised the use of a UK-incorporated entity should allow its shares to be in the FTSE All-Share and FTSE 100 indices.”
But the necessity of incorporating in the UK created a problem. Shell had previously escaped stringent “controlled foreign companies” rules, which impose extra tax on income earned in low-tax countries because its UK arm owned just 40 per cent of the group. As a UK-incorporated company it would now feel the full force of the rules, which could cost it hundreds of millions of pounds.
Shell found a way round this problem by reversing into a “shell” company that was exempt from the CFC rules for a highly technical reason: under the terms of a double taxation treaty, it had become non-resident before April 2002.
It was an ingenious solution. But Revenue & Customs became concerned the trickle of companies using this loophole could turn into a flood. So in this year’s Budget, it made a pre-emptive strike to stop any more using this route.
But the new rules may not prove insurmountable. Party Gaming, the online poker company, last year showed it was possible to join the FTSE 100 index despite being incorporated in Gibraltar.
Copyright The Financial Times Limited 2006
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
