Nothing about the narrow cream-coloured lobby at 160 Aldersgate Street in the City of London financial district gives a hint of its role at the centre of the offshore oil industry.
That’s because the building is occupied by a law firm. Yet, on paper at least, it is also home to Rowan Companies, one of the largest operators of drilling rigs in the world.
In 2012, Rowan, which has a market value of $4 billion U.S., shifted its legal and tax base from the United States to Britain. But not much else.
Indeed, Rowan filings say the shift helped cut the company’s effective tax rate to 3.3% in 2013 from 34.6% in 2008. A company spokeswoman says Rowan complies with all U.K. tax rules.
A government spokeswoman for the Treasury said recent changes to the tax rules were aimed at supporting "genuine business investment".
"The U.K. is not a tax haven. In 2015, our main rate of corporation tax will be 20%, well above the levels seen in tax havens," she said in an e-mailed statement.
In the last year around a dozen major U.S. companies including media group Liberty Global, banana group Chiquita and drug maker Pfizer unveiled plans to shift their tax bases overseas outside the United States.
Historically, when U.S. companies wanted to cut their tax bill they usually reincorporated in Caribbean Islands or Switzerland.
However, following recent legal changes whereby Britain largely stopped seeking to tax corporate profits reported in other countries, including tax havens, companies are increasingly choosing the UK as a corporate base.
President Barack Obama and Congressional Democrats have proposed measures to stem the flow of so-called "inversions", although Congressional gridlock on tax reform means new barriers to overseas moves are unlikely anytime soon.
There is no official list of companies which have moved their tax base to Britain but government officials, tax advisors and lawyers said at least seven had re-based to London -- Aon Plc, CNH Global N.V., Delphi Automotive Plc, Ensco Plc, Liberty Global Plc, Noble Corp. Plc.
Drugs group Pfizer and Omnicom had planned to transfer their tax domicile to Britain, while retaining U.S. headquarters, but the takeover deals which were meant to facilitate this recently failed.
U.S. and U.K. filings and other company statements from the seven that relocated showed that while redomiciling to London can cut a company’s tax bill, it usually involves relocating just a handful of senior executives -- and sometimes not even that many.
Bernhard Gilbey, tax partner at law firm Squires Sanders said tax competition was common across countries and that companies were within the law and indeed faced competitive pressure to structure themselves in response to such governmental incentives.
The companies said that while tax was a consideration in their moves, commercial reasons such as the desire to be closer to customers was also a factor.
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