The company behind the very popular app Snapchat, called Snap, decided to move their international headquarters to London, United Kingdom. This might seem bizarre for such a big company, especially an American one. The reason would be that usually, firms are moving their headquarters in countries with lower taxes like Luxembourg or Ireland. Among others, Facebook, Uber or Google have done this in the past.
London headquarters for Snapchat
However, some are saying that this might be a very intuitive move for Snapchat. Recently, other big tech companies have faced backlash regarding their supposed tax avoidance. So, by moving to London, Snapchat might escape from such accusations. The idea is that the company is going to book in the United Kingdom all the advertising sales which are made in countries where Snapchat does not have an office. As for the high tax rates of the United Kingdom, Snapchat should not have difficulties because, as an analyst suggests, its approximate revenue for this year is of $1 billion. It may not seem like much, especially when compared with giants like Google ($49.7 billion), but Snapchat ‘s growth rate is extremely fast. According to the same analyst, it grows eight times faster than its rival firms.
Snapchat has around 250 million of daily users in the entire world. Over 50 million of those are from Europe alone. Still, why choose London especially amid the Brexit issue? Uncertain, but it might prove profitable. It looks like the United Kingdom capital city remains a very attractive point for tech companies. A very important reason for this might be the country’s resources in the tech and art sector. By this, we refer to the many talented young people who the companies might recruit. The city is also a very big financial hub, so it is much easier for startups to find funding here than in other places.
The current situation
For the moment, Snapchat has 75 staff members in London. However, considering that it only had 6 employees when it started, the company seems to have grown a lot. In the beginning, Snapchat was recruiting talented people from bigger companies like Instagram or Amazon. General manager Claire Valoti even said that London and the United Kingdom in general, offers some of the best creative industries in the world.
Snapchat entered the market back in 2012. At first, it allowed users to send photos to each other which were disappearing a few seconds after the receiver saw them. Now it has become much more and created an obsession with its special filters. The user can apply them on their face and send the snaps to friends or post them. Instagram has recently been accused of mimicking (or stealing) Snapchat ‘s features in its Insta Stories update. Even if its popularity is not as big as a few months ago (and maybe that is Instagram’s fault), Snapchat is still doing great. All in all, this might prove to be a boost in confidence for the United Kingdom, especially after the country voted to exit the European Union and everyone thought that it would not end well. It seems like things are not so bad after all.
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