Like Shell and Unilever, DSM will not soon officially become a Dutch company. The Limburg Food Company will merge with the Swiss Firmenich. The future company, DSM-Firmenich, will soon be Swiss from a legal point of view.
This makes DSM the third Dutch multinational to “leave” our country in a short period of time. But according to the company, you can not only compare the move with Shell and Unilever, which had headquarters here and in London, but ultimately chose London.
“I think we are very different from Shell and Unilever,” said Dimitri de Vriesi, a co-CEO of DSM. “We’re not going from two main offices to one, but from one office to two. That’s a big difference.” DSM will already have two main offices, one in Maastricht and one in Switzerland. Jobs will also be preserved in the Netherlands and the company wants to grow here, especially in the biotech location in Delft.
Dutch tax rules were an important reason to leave Shell and Unilever. Here you must pay dividend tax, which is a tax on the distribution of profits that the company pays to the shareholders. This is not necessary in the UK.
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According to the DSM, taxes played no role in the merger with Switzerland. “No, there were absolutely no tax considerations,” de Vries said. Switzerland also has a dividend tax, which is higher than that of the Netherlands: 35 percent, here 15 percent.
“So it doesn’t seem to me that they are moving for tax reasons, if to a country with a higher profit tax,” says tax law professor Jan van de Strick v. NOS† “But as a result, the Netherlands will lose income from the dividend tax from the DSM. This is a hindrance to the Treasury.”
The question remains why the merging company would choose a “legal branch” in Switzerland and not here. According to the DSM, the explanation is simple: during the negotiations, this was a requirement of the family company Firmenich, which has been based in Switzerland for more than 125 years.
“An important part of the discussion for us was: We want a dual head office with a branch in Maastricht and a listing on the Amsterdam Stock Exchange,” says de Vries. “And then you balance the trade-offs and that means the legal entity will actually be in Switzerland.”
As a result, the DSM will likely lose the royal predicate, just like Shell. “I don’t know exactly what the rules are,” says de Vries. “But I believe that if you are legally resident in Switzerland, this royal family cannot be kept.”
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