Tech start-up Snapchat picks UK for international HQ
US tech company Snap, which supplies the popular Snapchat app, has announced it is to establish its international headquarters in the UK and will be billing all non-US revenue via this office
10 Jan 2017
The move follows McDonald’s decision at the end of last year to shift its non-US tax base from Luxembourg to the UK, but is unusual as other tech giants, including Apple, Google, Twitter, Uber, Facebook and others have traditionally opted for lower-tax regimes such as Ireland, the Netherlands or Luxembourg.
Snap Inc, which is based in Los Angeles, has said that its UK entity, now renamed as Snap Group Ltd, will book revenues from all sales made to customers in the UK and sales in any country where Snapchat has no local entity or salesforce.
Snapchat, which lets users send photos and short videos which expire within seconds, makes its money from advertising. It claims more than 150m daily active global users including more than 50m in Europe.
The company is expected to go public this year with a potential valuation of up to $25bn. It has yet to record a profit, and has only recently begun generating revenue outside the US, so its tax liabilities are likely to be considerably smaller than its older competitors, several of which have faced strong criticism over their tax arrangements.
Snapchat opened its first overseas office in London in late 2015 and now has 75 staff. It will now open a second site and recruit additional employees.
Claire Valoti, general manager of Snap Group in the UK, said: ‘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.’