Boston, MA 06/06/2014 (wallstreetpr) – The growing trend in which U.S. companies are moving to reincorporate abroad has been termed as worrying. However, the reason for doing that makes sense for shareholders even if the government might not see that. While Western Union Company (NYSE:WU) maintains its official corporate base in the U.S., the company is among those that are aggressively seeking offshore tax havens.
In the latest report by the Colorado Public Interest Research Group, Western Union and Liberty Global, all based in Colorado, are among the 362 multinational operators that maintain an increasing number of offshore subsidiaries with the aim of lowering tax to increase the bottom line.
As for the global money transfer company Western Union, the company was found to maintain about 45 offshore subsidiaries in locations that offer friendly tax practices such as Ireland, Singapore, Switzerland, Bermuda and Costa Rica. Western Union does not regret its vast offshore investments. In a response to the Colorado report, the company said that as a global company it seeks to be everywhere.. As concerns offshore subsidiaries, the company said as of March 2014 it had about $1 billion in cash and cash equivalent held in entities outside the U.S.
Others seeking offshore benefits
The race to boost the bottom line is attracting many players in the corporate America. In addition to Western Union Company (NYSE:WU) and Liberty Global, other notable companies with growing interest towards lowering tax burden include financial institutions Bank of America Corp (NYSE:BAC), Wells Fargo Co (NYSE:WFC), Morgan Stanley (NYSE:MS), Goldman Sachs Group Inc (NYSE:GS), Citigroup Inc (NYSE:C) and JPMorgan Chase & Co (NYSE:JPM), all of which maintain a combined number of 702 entities outside the U.S. in tax havens.
Challenges company opportunities
For multinational companies like Western Union Company (NYSE:WU), it is never lost on the management that the bigger they become the harder you fall. As such, as the company pursues opportunities in many locations around the world, it not only increases the bottom line, but also threats to its business. On that note Western Union recently revealed its investment in big data to secure its systems. At least, the company does not want to suffer the embarrassment of that Target Corporation (NYSE:TGT) recently suffered over a devastating data breach.
