New European HQ for Snap Inc. Will Be in London
"Today, the media reported that we selected London as our International HQ. That is not true. We have one HQ, in Venice, and many offices throughout the world.
"We did, however, make a change to the way we operate our business in London. Going forward, we will bill our advertising revenue from the U.K. (and a few other countries) through a U.K. entity. This allows us to pay taxes in the U.K., which we believe is part of being a good local partner as we grow our business.
"We want to pay taxes in the countries where we sell advertising, and this is an important step in building the infrastructure to achieve that goal.
Snap Inc., parent company of Snapchat and Spectacles, has today revealed plans to open its new European headquarters in London. Brand new offices will serve as an expansion of the company's existing operations in Soho, which currently employ 75 people under the name Snap Group Limited. The story, broken by the Financial Times, has been described by the Evening Standard as 'a post-Brexit boost for Britain.' Still, it bears asking why the $25 billion social media giant has chosen such an unorthodox route overseas.
Undoubtedly, Snap Inc. is bucking a well-established trend. Other big players in the industry, such as Google, Apple, Facebook and Twitter, have generally chosen to establish European branches in either Ireland, Luxembourg or the Netherlands, where corporation tax is much lower than it is in the UK. However, as Snap Inc. explained, not only will its new HQ be established here in Britain, but it will also refrain from routing its UK sales through other European countries. In other words, it will actually pay tax.
The move is further complicated by the political context. Following the Brexit vote in June, many forecast the migration of UK tech talent elsewhere. Indeed, as the BBC then reported, in the immediate aftermath of the Leave vote, Berlin's Senator for Economics and Technology prioritised wooing tech start-ups to establish headquarters in Berlin. 'Those companies...are aware they need to be in the EU,' she claimed. 'We had competition for the last two or three years between London and Berlin. I am now convinced that more funds will now make the decision to favour Berlin.'
According to Snap Inc. spokespeople, however, the contrary decision announced this week was based on the UK's reputation for inventiveness, alongside the company's exiting use of London-based advertising services and the pool of talent in the city itself. As Claire Valoti, General Manager of Snap Group Limited, told journalists, 'We believe in the UK creative industries. The UK is where our advertising clients are, where more than 10m daily Snapchatters are, and where we’ve already begun to hire talent.'
Indeed, as the Independent points out, Snap Inc. won't be alone in investing in post-Brexit London. Google, for instance, announced plans in November to build a massive new 7,000-employee HQ in the capital, which many hailed as a 'major vote of confidence' in post-Brexit Britain.
Whether Snap Inc. is following Google's footsteps, or would have proceeded with the move regardless Google's decision, is unclear. What we do know is that, at least for now, some of the world's biggest and most influential technology firms have no intention of leaving London behind.
James has a Bachelor’s degree in History and wrote his dissertation on beef and protest. His heroes list ranges from Adele to Noam Chomsky: inspirations he’ll be invoking next year when he begins a Master’s degree in London. Follow him @Songbird_James
New European HQ for Snap Inc. Will Be in London Reviewed by James Stannard on Tuesday, January 10, 2017 Rating: