The new headquarters of Fiat Chrysler Automobiles in London will be staffed by around 50 people and most of them will have finance backgrounds, two people privy with the details of FCA’s plan to move its tax residency to the United Kingdom told Automotive News Europe.
Among those holding offices in the UK are Fiat Chrysler chief executive Sergio Marchionne and Fiat Group Chairman John Elkann, one of the sources said, adding that chief financial officer Richard Palmer might also hold office in London.
One of the sources divulged that most of the staff in the London base will take care of treasury operations, although Fiat Chrysler has no immediate plans to tap new employees in London, adding that the carmaker’s Turin and Chrysler HQs will not be closed or will not have their workforce reduced.
The source told Automotive News Europe that the Fiat Chrysler is just adding a new office instead of shutting down an old one. One of the sources added that the Fiat plans to move more finance staff from Europe to Asia Pacific and Latin America.
Fiat’s decision to move its tax residency to the UK will allow it to take advantage of a 20-percent corporate tax rate in 2015, which is much lower than the rates of 31.4 percent in Italy and 35 percent in the US.
While the move may be advantageous financially for Fiat Chrysler, its location has become a cause of concern, especially because of the carmaker’s American-Italian background. Fiat has been based in Turin, Italy for around 115 years while Chrysler is one of the Detroit 3 and was bailed out by the US government in 2009.
Earlier this month, US Senator Carl Levin said he plans to introduce legislation that makes it more difficult for companies to shift their tax residence out of the US following a merger.
Around 14 US companies have completed these “inversion deals” since January 2012 or are considering them, according to Bloomberg. Fiat Chrysler will open its London office before the end of 2014.