LONDON/TOKYO - The retailer of Muji products is considering moving its European headquarters out of the U.K. because of Brexit, in what would be at least the second such shift by a Japanese company.
Ryohin Keikaku Co., which sells everything from furniture to kitchenware under the Muji brand, is weighing Germany as the most likely site for a new European base, according to a person with knowledge of the situation who didn’t want to be identified because the plans aren’t public. It isn’t clear how many of the roughly 50 employees based at its London offices would move if the company goes ahead with the relocation, the person said.
“As a company we’re reviewing the risks from Brexit and always considering all available options,” a spokeswoman for Muji, which has 12 U.K. stores, said by email. “We have not made a decision on moving our office since no new location has been decided on.”
The plans indicate a wider move away from the U.K. by Japanese companies after Panasonic Corp. announced last week that it is switching its European headquarters from the U.K. to Amsterdam because of Brexit. The electronics maker said potential tax complications are another factor behind its planned move to the Dutch capital.
A lack of clarity over the U.K.’s future relationship with the European Union has provoked a number of companies to move headquarters or open new manufacturing and distribution hubs on the continent to avoid potential trade barriers. After the divorce, companies could be forced to pay tariffs to import and export goods between the U.K. and the EU. Japanese companies, with significant interests in the U.K. in industries ranging from autos to semiconductors, have signaled special concerns.
Japan and the EU signed a new trade agreement in July that lowers barriers on the movement of goods and services between the two economies. The U.K. probably won’t benefit from the deal, which was five years in the making, once it leaves the EU.
Beyond Brexit, Japanese companies are facing a tax quandary in Britain as the government continues to lower U.K. corporate rates.
Under Japanese rules, if a subsidiary is paying less than 20 percent tax in another country, it could be subject to taxes in Japan. The measure is an attempt to prevent companies from using tax havens to avoid payments. Panasonic cited the potential for the U.K. to be labeled a tax haven in the future because of its 19 percent rate, which will be lowered to 17 percent in 2020.