The jurisdiction of a listed company’s incorporation can affect both its and its group’s tax position, as well as its eligibility for admission to stock exchange indices (e.g. FTSE).
UK tax issues have meant, for some groups looking to undertake a listing, that a non-UK- incorporated holding company (e.g. Jersey, Guernsey, Cayman Islands, Isle of Man etc.) that is tax resident outside the UK is preferred. In recent years, however, the UK has become a more attractive holding company jurisdiction, so early tax advice is recommended.
FTSE index inclusion is one of the key advantages of listing as it improves liquidity and assists the marketing of an offer and subsequent secondary offers. A UK-incorporated, UK resident public company is the easiest route to FTSE inclusion, and for many businesses is the natural choice for the listed holding company of their group. However, other options may be considered in order to achieve the optimal tax position.
It is possible for non-UK-incorporated, non-UK resident companies to qualify for FTSE UK index inclusion but the additional rules governing FTSE index inclusion will need to be complied with. The aim is, therefore, to combine FTSE index inclusion with the optimal tax position of the group and obtaining a co-ordinated and informed view from advisers on these issues at an early stage is essential.