Update: Snap has clarified that it is not making London an international headquarters – its San Francisco office remains the company’s only official HQ. Rather, this move means the company will start billing its ad revenue in the UK, and a few other countries, through the newly-created UK entity in order to pay tax locally.
“We want to pay taxes in the countries where we sell advertising,” reads its statement, “and this is an important step in building the infrastructure to achieve that goal”.
Snap Inc, the company behind image messaging app Snapchat, has established its international headquarters in the UK.
From the HQ, Snap Group Limited – the company’s newly created UK entity – will book all sales made in the UK and the sales in countries where Snap has no local entity.
The decision, ahead of the company’s upcoming IPO, which will reportedly bring in up to $25bn (£20bn), differs to that of other US tech rivals, like Facebook and Twitter, who have set up in lower tax EU countries – such as Ireland, the Netherlands or Luxembourg.
“We believe in the UK creative industries,” Claire Valoti, general manager of Snap Group Limited, said in a statement. “The UK is where our advertising clients are, where more than 10m daily Snapchatters are, and where we’ve already begun to hire talent.”
The move by Snap is a massive vote of confidence in the UK, with the country heading towards a Brexit from the European Union. The company, which has 150m global daily users, currently employs 75 UK personnel in London, where it opened its first overseas office in late 2015.