Brexit Drains Swamp in London, Creatures Head to Luxembourg
by Wolf Richter
Mar 13, 2017
Tax planning for a post-Brexit world.
In its report on the “world’s worst corporate tax havens” last December, Oxfam rated Luxembourg in 7th place, behind Bermuda, Cayman Islands, the Netherlands, Switzerland, Singapore, and Ireland.
But the “City of London,” a largely autonomous square mile within London where the threads of global finance meet, was given a special mention: The number one “unexpected absence” from the list of the top 15 worst tax heavens. Oxfam’s report put it this way:
The UK’s City of London is at the centre of a web of Crown Dependencies and Overseas Territories, over which the UK wields both official and informal influence. The 14 Overseas Territories include the Cayman Islands, the British Virgin Islands and Bermuda, and Jersey is one of the UK’s three Crown Dependencies. As Jersey Finance, the official marketing arm of the Jersey offshore financial centre, puts it, “Jersey represents an extension of the City of London.”
There were plenty of reasons for financial outfits of all kinds to settle in the City of London. But now that Brexit will likely throw a monkey wrench into unfettered access to the European Union for these firms, they need to head to the continent. And tax haven Luxembourg appears to be a big beneficiary in a post-Brexit world.