Messaging app Snapchat picks London as its international headquarters
Messaging app Snapchat has chosen London as the home of its international headquarters in a vote of confidence for the UK as it prepares for Brexit.
The Los Angeles-based group, which has 150 million users a day worldwide, confirmed it will book all sales made outside the US and where it has no local entity in Britain – rather than following the lead of rivals such as Google and Apple in choosing Ireland or the Netherlands to take advantage of lower-tax regimes.
Snap Inc said the UK’s strong creative industries made it “a great place to build a global business”. Claire Valoti, general manager of Snap Group in the UK, added: “We believe in the UK creative industries.
“The UK is where our advertising clients are, where more than 10 million daily Snapchatters are, and where we’ve already begun to hire talent.”
Snap, which is planning a US stock market flotation this year with a reported valuation of up to 25 billion US dollars (£20.6 billion), is set to open a new site near to its existing office in London’s Soho and hire more staff, including a small number of engineers.
It now has more than 75 staff in the UK, up from just six a year ago. The group’s decision to base itself in London comes amid public and political anger over tax avoidance measures used by multi-national groups and US technology giants in Europe.
Fast food chain McDonald’s announced in December that it is moving its non-US tax base to Britain from Luxembourg as it battles EU regulators over its tax affairs.
The chain is creating a new UK-based holding company through which its non-US royalties will be routed and it will pay UK corporation tax on its international profits.
The EU’s competition commissioner Margrethe Vestager has put the tax affairs of a number of high-profile targets including Amazon and Google under the microscope.
Earlier this year, the EU slapped US tech giant Apple with a 13 billion euro (£11.4 billion) tax bill.
Snap’s move to base its international HQ in London comes after Facebook, Apple and Google and IBM have all committed to Britain in recent months following the Brexit vote.
IBM said in November it would launch four new cloud data centres in the UK, while Apple is set to consolidate its London operations in Battersea Power Station from 2021
Google will also open a new London building that could create up to 3,000 jobs and Facebook plans to create an extra 500 jobs in the UK when it opens its London HQ in 2017.
Snap’s decision comes ahead of its initial public offering (IPO), which could see it list as early as March.
It would be the biggest flotation since Chinese e-commerce giant Alibaba’s IPO in 2014.
Snapchat launched in 2012 as a free mobile app allowing users to send photos that expire within seconds.
Its parent group announced last September it was renaming the company to Snap Inc as it develops further products, including sunglasses with a built-in video camera.