Jensen Huangs recent visit to China made me wonder if Nvidia or any other big tech firms could relocate HQs to another country. Maybe not China but Europe or South Korea.
What is there to stop big companies simply leaving the US?
r/ask
Jensen Huangs recent visit to China made me wonder if Nvidia or any other big tech firms could relocate HQs to another country. Maybe not China but Europe or South Korea.
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Europe = too many regulations and taxation. US is by far the biggest consumer market, so why would you leave that?
You need a big U-Haul for that sort of movement. Doesn’t exist yet. Could be the next trillion dollar business.
The US is the biggest consumer market and the EU has too many stupid rules that slow things down
China may have the biggest consumer market in the future, but that’s at least ten years away at this point
…but even if China was the biggest consumer market, CEOs at Chinese companies can be disappeared for being overly critical of the government whereas, in the US, a CEO’s freedom and assets typically require due process to take away and speech can never be the justifying reason.
The US government can put legal obstacles to stop the company from moving. Common methods include national security reviews, exit taxes that may require transfer of IP, capital gains taxes, etc.
Governments are heavily involved in corporate structures. When you have a buyout/merger, regulators from multiple countries need to approve. When a company establishes an illegal monopoly, the justice department may mandate a “spinoff” and divestiture of assets.
That is not to say that the tech giants cannot relocate to Europe, Korea, Japan, etc. But its much tougher to do so than a snap of a finger and there will be government interventions along the way.
If in order to move to Europe, Microsoft needs to transfer its IP and its employees are still in Redmond, WA then what is it moving?
Nothing technically stops any company from transitioning or moving HQs, even within the United States, you see HQs move to different states but its not a regular operation. What makes it difficult is normally the tax advantages they get having a base of operations located in specific markets and Countries. It’s why for instance multiple US Companies have European HQ in Dublin Ireland to take advantage of the better tax laws.
What would stop many American corporations from moving is a few issues that arent easily surmounted. First of course, taxes, second would be the increase in red tape for start up found in other countries. Take the EU for instance you arent dealing with a singular goverment yes the EU is trade bloc yet each host nation has its own rules and regulations in regards to employment law and tax law. Third concern is access to funding, the US has large amounts of investor capital and its stock market still reigns supreme at least for now. Final issue of course at least from my thoughts on it is access to top talent. The US besides having favorable employment law for corporations also has tons of top talent from highly qualified schools.
Then comes the main issue of course is that already established companies would find it very difficult to move operations to start over from scratch, when Toyota USA moved its HQ from California to Texas it was able to transition many of its already established employees.
For a whole entire corporation to move from the US to another country most likely wouldn’t be able to move even a quarter of its workforce. Established talent would prefer to stay in the US where their families and friends are located. Not to mention the changes in salary would make it impossible to transition many into the same roles. Then for instance say you wanted to move to Korea how much of the current workforce would be able to transition to Korea? They wouldn’t speak the language would have a huge impact on QOL and would be alienated in a new country. Not many would take the relocation package. So the company would have to build up the HQ from the bottom up. Meanwhile in that time it would be hemorrhaging market position as a huge change would take time to fully implement and staff.
Corporations will always follow the money. They have no loyalty to any particular place.
A lot of them already have a significant presence in China and a few other countries. A significant portion of American financial regulation is to make the U.S. the most lucrative location for many of these companies to stay, mainly in making sure they can avoid paying taxes of any kind. If you want to boil the difference down between being HQ’d in the US and China, in the U.S. the business tells the government what it wants. In China the government tells the business what it wants. A big part of the dissatisfaction with government in general in the U.S. is the perception that the wealthy can do whatever they want. That is why current Republican messaging stresses SO HARD the idea that Trump is “the one good billionaire” who will make all the others obey. They keep screaming that while making sure you don’t pay attention to what’s actually happening behind the curtain.
Nothing.
The problem is they’ve been leaving the US for decades. Moving factories to low wage countries since at least the 70s.
That ladder redditors claim the boomers pulled up behind them.
Nobody pulled it up.
Business took the ladder to Vietnam, China, Mexico, several others to make Nikes for $3.
Easier to just open satellite offices and staff them accordingly. And they do.
All the automakers have large engineering campuses in China.
Mind you, they do the same. Honda, toyota engineer products in the US.
As for formally relocating “HQ”, irrelevent. Taxes get paid where revenue is earned, it’s a ceremonial title in many ways, though the US is undeniably one of the most capitalist friendly countries with pretty strong protection for private ownership and rights.
Assuming the orange idiot stops what he’s doing, nothing.
This admin seems to have taken for granted what makes our country truly great in terms of being a superpower.
Now I’m saying this as if we still have it, but who knows in another couple of months, or its pretty much gone.
The US has some of the best researchers in the world, or they come here to continue that research. We have some of the best skilled labor in the world, mainly tech, finance, and final products. We consume larger than most countries, and it’s a diverse country. Our tax system is favorable to companies. Stable currency and economy. The cost of moving isn’t that simple, it’s hard to do it and get set up in another country and be subject to their laws. Again, while the US has a lot of regulations, some think we don’t have enough when compared to other countries.
There’s still a lot of reasons to stay here…..for the time being.
This is a Debate that popped up when the UK did the Brexit. In short it costs way too much to move a corporate office within a country, that relocating overseas to have less influence with your biggest customer would be invaluable.
People looking to found a company or moving recent startups won’t move to the UK anymore, and they could very well be true with the US soon enough.
Nothing. See the exodus of businesses from the UK after Brexit.