 Why do companies reincorporate abroad? Evidence from EuropeMassimo Belcredi, Lara Faverzani and Andrea Signori Journal of Multinational Financial Management, 2025, vol. 77, issue C Abstract: We take advantage of the institutional, fiscal, and regulatory differences across European countries to investigate why firms decide to reincorporate. Reincorporations within Europe have become increasingly common over the last decade, with Italy experiencing the largest outflow of firms and the Netherlands being the preferred destination. We investigate the expansion, tax saving, and regulatory arbitrage explanations. The evidence does not support the expansion and tax saving motivations as we observe no significant changes in firms’ investments and effective tax rates. On the other hand, we find that firms reincorporate in countries with a permissive legislative approach towards the adoption of control-enhancing mechanisms, as predicted by the regulatory arbitrage explanation. This is especially the case of Italian firms reincorporating in the Netherlands as they implement a degree of separation between ownership and control that goes beyond what their country of origin would allow. We discuss the governance implications of such decision. Keywords: Registered office; Business expansion; Tax saving; Regulatory arbitrage; Control-enhancing mechanisms (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:77:y:2025:i:c:s1042444x24000604 DOI: 10.1016/j.mulfin.2024.100895 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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