The billionaire inventor and vacuum cleaner tycoon James Dyson’s company Dyson Ltd has announced that it will be relocating its headquarters from UK to Singapore. The decision has received blistering criticism from eminent parliamentarians and has dealt a blow to the British government which is scrambling for ways to convince businesses to stay in the country post-Brexit. The post Brexit uncertainty has started a drive in UK businesses to move their HQs to EU member states.
Dyson Ltd, known for its vacuum cleaners and hair dryers has expanded recently in hair-care products and air-purifiers. The company has expanded its customer base in Asia. Chief executive of Dyson Jim Rowan said that Dyson is a ‘global technology company’ as 96% of its sales come from outside of UK.
Critics have called the decision hypocritical and a betrayal of British public’s faith as Mr. Dyson was one the prominent figures in UK who ardently supported Brexit before the 2016 referendum. Top officials from the company say that the decision has nothing to do with Brexit and more to do with the fact that their growth rate in Asia doubled in last couple of years. The shift in location of its HQs is to tap the huge revenue potential in Asian markets including China and Singapore.
Singapore is a top investment destination for businesses planning to expand in Asian markets as the city state has free trade agreements with European Union, USA and ASEAN. The country which signed its first FTA with ASEAN in 1993 has a network of FTA’s covering 18 regional and bilateral FTAs with 24 trading partners. The UK government plans to reduce its corporate tax rate to 17% in 2020 from the current 19%. While Singapore’s corporate tax rate is 17%, it offers businesses additional tax deductions for investing in research and development. Singapore is very transparent about its policies as it holds regular discussions with business leaders to ensure clarity and consistency which is in contrast to the looming uncertainty in Britain today.
Mr. Rowan said that tax difference is negligible to them and the primary motive for the switch is to be near the manufacturing bases and markets with the biggest demand. The company said that it will continue to pay taxes in Britain along with planned investments in Bristol, Malmesbury and London. Mr. Rowan assured that none of its 4000 jobs at the product development center in south-west England will be affected.
James Dyson, the founder of Dyson Ltd is a 71 year old inventor of bagless Dyson vacuum cleaners. The company after the breakthrough invention of bagless technology sold millions of units of its product and became a household name. The company later started selling dry cleaners, hair dryers and air purifiers. It’s also planning to launch its new product which is an earphone-cum-air purifier. In 2018, the company reported an annual profits of £1 billion.