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Scotland is not moving, how about you?
The Referendum is over and Scotland will remain in the United Kingdom. However the vote was fairly close - 55% to 45%, out of an 84.5% turnout. That still leaves a large percentage of Scottish people who want independence and the subject is not going to go away completely. Soon there will be a major debate in Westminster on the future of the union which will likely lead to other changes, including the likely devolution of further powers to Scotland's parliament ("devo-max"). In his statement following the announcement of the result, the Prime Minister has promised a “devolution revolution” across Great Britain, including votes on English issues by English MPs at Westminster, although no such changes will take place until after the next General Election in 2015. So, despite the outcome of the Referendum, a level of uncertainly about the future still remains, but nowhere near as much as had the vote gone the other way.
In the run up to the Referendum, a number of larger Scottish banks and businesses indicated that they would move their head-quarters and/or businesses south to England, if Scotland became an independent country. Moving a company needs careful planning though - a Scottish company cannot simply move its registered office or re-register to become an English company. Movement will involve a reorganisation, either in the form of a transfer of shareholdings or of the business and assets of the Scottish company, to a company in another jurisdiction. This will have important legal and tax implications that need to be addressed. Planning relocation of staff may also involve some difficult contract and employment law issues, which will also need to be thought about carefully.
It remains to be seen whether these companies will now completely shelve their relocation plans or if any gained sufficient momentum to be continued “for other strategic reasons”. The publicity given to the Referendum and, in particular, the potential economic effects of independence, may also lead some international businesses with UK interests to pay more attention to where they want their UK assets located in future. Right now though, no-one really knows what sort of effect, if any, the no vote will have on future investment decisions involving Scotland and the rest of the UK.
Goodman Derrick is used to helping clients evaluate legal risk and developing strategies to manage them. Our corporate and employment teams are also very experienced in advising companies on international reorganisations. If you would like further information or help, please contact:
Edward Hoare, Partner, Corporate, firstname.lastname@example.org, +44 (0)20 7421 7974
Alison Downie, Partner, Employment, email@example.com, +44 (0)20 7421 7960
Joanna Higton, Partner, Corporate, firstname.lastname@example.org, +44 (0)20 7421 7998