Speakeasy forum

General discussion

Halliburton Will Move HQ to Dubai

Discussion is locked
You are posting a reply to: Halliburton Will Move HQ to Dubai
The posting of advertisements, profanity, or personal attacks is prohibited. Please refer to our CNET Forums policies for details. All submitted content is subject to our Terms of Use.
Track this discussion and email me when there are updates

If you're asking for technical help, please be sure to include all your system info, including operating system, model number, and any other specifics related to the problem. Also please exercise your best judgment when posting in the forums--revealing personal information such as your e-mail address, telephone number, and address is not recommended.

You are reporting the following post: Halliburton Will Move HQ to Dubai
This post has been flagged and will be reviewed by our staff. Thank you for helping us maintain CNET's great community.
Sorry, there was a problem flagging this post. Please try again now or at a later time.
If you believe this post is offensive or violates the CNET Forums' Usage policies, you can report it below (this will not automatically remove the post). Once reported, our moderators will be notified and the post will be reviewed.
Collapse -
Why not flee??

In reply to: Halliburton Will Move HQ to Dubai

They don't get any good press here

Collapse -
No... just good money.

In reply to: Why not flee??

What ever happened to the idea of increased profits will lead to reinvestment and more jobs in the US?

Collapse -
Are you sure they don't do that?

In reply to: No... just good money.

And is anyone sure they will not be paying any taxes in the US? I doubt that's the case.

Collapse -
Am I sure who does what?

In reply to: Are you sure they don't do that?

As for taxes? I didn't comment on that... Just for S&G I did do a bit of quick research on the subject. I leave it up to the reader to judge the credibility of the sources for themselves.

Under investigation and relocating to Dubai

"Halliburton is under Justice Department Securities and Exchange Commission investigation over allegations of improper dealings in Iraq, Kuwait and Nigeria," Whitley Strieber wrote March 12, 2007.

Halliburton announced on March 12, 2007, that "it would open a corporate headquarters in the United Arab Emirates city of Dubai and move its chairman and chief executive, David J. Lesar, there." [1] "Halliburton will remain a US company subject to US laws, but Dubai has no extradition agreement with the United States, meaning that Mr. Lesar could not be compelled to return to the US to testify, stand trial or serve any sentence related to any Halliburton activities under investigation."

The company will also maintain its existing corporate office in Houston, Texas, "as well as its legal incorporation in the United States, meaning that it will still be subject to domestic laws and regulations." [2]

"According to this 2004 GAO report, the company is incorporated in Delaware, but has (or had at that time) 17 subsidiaries in tax-haven countries." [3]

In February 2007, "Congress was told that $2.7 billion paid to Halliburton and its subsidiaries and subcontractors for work done in Iraq was either excessive or unsupported," Strieber wrote. "Another upcoming investigation that affects Halliburton is the current scandal at Walter Reed Army Medical Center. The Washington Post reported that the Army agreed to privatize the operaton of Walter Reed by awarding a $120 million contract to IAP Worldwide Services, a contractor with connections to KBR, a Halliburton subsidiary."

"Although the announcement of the new Dubai arrangement took many by surprise, Halliburton said that the move was part of a strategy announced in mid-2006 to concentrate its efforts in the Middle East and surrounding areas, where state-owned oil companies represent a growing source of business." [4]

Any US company including subsidiaries owned by Haliburton and/or KBR that moved their headquarters to tax haven countries before March 4th, 2003 were able to re-incorporate in "corporate inversion"

the inversion sets the stage for parking money offshore with US tax advantages. Most obviously, the new Bermuda parent and its foreign subsidiaries (not owned through the old US company) can earn foreign income free of US tax (until paid to US public shareholders as dividends). This benefit from inversions really is not that important, however, since real foreign income pays little US tax today (being parked in low-tax foreign corporations).

What is important is that foreign subsidiaries of the group now can get some US income ? that?s US income ? at a reduced or zero US tax. As noted in an earlier post, to prevent artificially parking movable income, like interest and royalties, in tax havens, current US anti-abuse rules tax this movable income of foreign subsidiaries of US corporations as earned by the foreign subsidiaries. After an inversion, the group can have foreign corporations that are not owned by a US company. So, after an inversion, the US operating corporation can pay interest or royalties to a foreign member of the group and get a deduction that reduces the US corporation?s (and, thus, the group?s) US tax, while the payee corporation is subject to low or no US tax. (One popular technigue for securing a low US tax on the payee uses our income tax treaty with Barbados, as discussed in an earlier post.) Moving US income offshore in a deductible fashion is referred to as ?stripping? US income.

An example of this strategy was seen in 2003 when...
Tyco votes to stay offshore

Tyco former boss Dennis Kozlowski is facing tax evasion charges
Shareholders in scandal-hit conglomerate Tyco have voted to keep their company registered in Bermuda, resisting a move to bring it back to the US.

I did make the comment "What ever happened to the idea of increased profits will lead to reinvestment and more jobs in the US?" I am curious to see if Haliburton moving overseas will increase jobs here in the US. Seems kind of counterintuitive to me but I'm no accountant or MBA.

Collapse -

In reply to: Am I sure who does what?

What ever happened to the idea of increased profits will lead to reinvestment and more jobs in the US?

Are you sure they are not reinvesting and making more jobs in the US?

Others claimed that they weren't paying US taxes. That was in the original post. I am not at all sure it's true.

Note that I am in favor of anyone, any time, getting any break on taxes that they can.
Collapse -
"making more jobs in the US?"

In reply to: This:

I don't know. I can only speculate.

As it is, I can't imagine the current corporate head quarters in the US maintaining the same number of employees with world wide oversight moving to Dubai. More jobs in other divisions of the company? Well, that depends on where the work is and what wage the company is willing to pay. Since Halliburton is moving corporate head quarters overseas to get closer to corporate interests then it seems the jobs are overseas for current workers as well. KBR works mostly out of country right now... it appears the companies interests and income lies overseas. Hiring a US worker just to pay for transportation and housing overseas does not seem cost effective so if I were them, I wouldn't be looking for US employees for anything but administrative positions or jobs that require some security considerations. Even these workers will only spend a portion of their wages for US goods and services until they get back to the US.

Halliburton can do what it wants... still, I don't see a win-win for US jobs in the short run by Halliburton's actions.

Collapse -
Corporate HQ remains in USA;

In reply to: This:

taxes still paid here. A Lehrer report said the only known advantage for the move is to be closer to many major clients, which is also what Halliburton said. Sounds like good business.

Collapse -
Can't give exact figures but it looks like

In reply to: Am I sure who does what?

decreased corporate taxes = increased shareholder income = increased personal taxes. A tax is a tax. Who's pocket it comes out of isn't important. It goes to the government and spends the same way.

Collapse -
Interesting thought.

In reply to: Can't give exact figures but it looks like

It may very well work that way.

Still, the concern expressed in the one article I linked to was that money invested overseas that was exempt from US tax considerations... not the profits flowing back in. I am not protectionist by any means but it strikes me as dangerous if capital investment in foreign industry is encouraged because those same dollars spent here are taxable but exempt if spent overseas. More bang for your buck? Certainly appears so.

Stock profits certainly benefit the shareholders... while doing nothing for the folks who can't afford them because of low paying, service economy jobs.

I would be interested in seeing projections that indicate there is an equal return back to the US for the amount of money sent overseas in investment dollars. However, I suspect it is more akin to our import/export trade. I could be wrong though.

Collapse -
Maybe another thought

In reply to: Interesting thought.

Why would anyone accept US dollars overseas if no one had a need or desire to buy something here? The money comes back. What it's worth overseas is what it will buy here at some point in the cycle.

Collapse -
(NT) Remember, corporations don't pay taxes.

In reply to: Can't give exact figures but it looks like

Collapse -
This is a shame!!

In reply to: Halliburton Will Move HQ to Dubai

How many people will be without jobs? I wonder how many employes they have in Houston?....Maggie

Collapse -
Seems "reality" to me.....

In reply to: Halliburton Will Move HQ to Dubai

A feeding frenzy by politicians and media "only" because of it's former head.

When Iraq broke open, it was the only company around with the experience, resources and willingness to "immediately" respond to government needs. All billing was against government contracts. Audits always bring disputes and adjustments as a regular exercise with high dollar contracts with all companies. Contracts are written at an estimated "X" level. Activity and time bring adds/amendments to contracts, resulting in "XX" level. The reasons for the audits.

After all, they are primarily in the oil business. Dubai is the center of the oil business from that entire area of the world. Makes good sense to be "part of the community". Do business "their way". That's the way to grow a business.

Spending expensive hours in the political gaming rooms known as Congressional Hearings is not business related or profitable. Located in Houston put them in the position of being micro-managed by non-business experts called congress persons via laws and civil servant bureaucrats with their red-tape regulations.

Will wait and see what this move does to their stock price over the next year. It's the stockholders who have the final word.

Collapse -
Besides not paying US taxes,

In reply to: Halliburton Will Move HQ to Dubai

the executives will be living extremely 'high on the hog' enjoying the world newest and best amenities for the wealthy.

Collapse -
Critics howl

In reply to: Halliburton Will Move HQ to Dubai


"This is an insult to the U.S. soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years," said judiciary committee Chairman Sen. Patrick Leahy, a Vermont Democrat.

Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, might hold a hearing on the implications, an aide to Waxman said.

Anything that ticks off Leahy and Waxman makes me feel all warm inside.
"They are being opportunistic in putting the CEO in the middle of the action." (William Sanchez, a U.S.-based analyst at Howard Weil)

Sanchez said he believed Halliburton's move to Dubai was not tax related. Instead he viewed it as a strategic play.

Alan Laws, an analyst at Merrill Lynch, said the move would likely help Halliburton's position in negotiating large contracts.

Halliburton said it would maintain its legal registration in the United States and was not leaving Houston, where it was currently based.

But Lesar told reporters: "At this point in time we clearly see there are greater opportunities in the eastern hemisphere than the western hemisphere."

Hmmm. Now THAT'S a problem.
Collapse -
What's more interesting is how

In reply to: Critics howl

certain people are howling at this and yet guys like JFK and Teddy K have plenty of offshore holdings that pay ZERO to the US Treasury.

Collapse -
Really? What holdings?

In reply to: What's more interesting is how

Edjamacate us please

Collapse -

In reply to: Really? What holdings?

I put a link here but some ???? saw fit to delete it

Collapse -
(NT) Follow the money...

In reply to: Halliburton Will Move HQ to Dubai

Collapse -
A couple basic facts, here:

In reply to: Halliburton Will Move HQ to Dubai

1. Corporations routinely pass on the costs of doing business - including their tax bills - to the customers. For a corporation, taxes are just another cost of doing business. So, it's safe to say that in practice, corporations don't actually "pay" taxes. Perhaps we ought to do what most major Western nations have done and end this charade by eliminating corporate taxation.

2. A corporation uses and allocates capital to produce goods or services which it then can sell at a profit. Basic economics tell us that capital is like water; it always takes the path of least resistance ("resistance" here being defined as taxes, regulation, and other costs that are within the corporation's power to control). So, there's nothing inherently wrong in Halliburton's decision so long as it's not being done to evade U.S. laws and regulations (the tax code excepted). Besides, its U.S. operations will still be subject to American regulations.

Honda is building a plant in the southern Indiana town of Greensburg that will start cranking out Civics in the fall of 2008. It's doing this because labor costs in Japan exceed even U.S. union labor costs and also because the regulatory climate in Japan actively discourages such new investment. Should not Honda be able to produce cars where it wishes in the effort to make the vehicles affordable and to keep up with demand for its products? Should not Halliburton be allowed to move wherever it wishes to put itself in a better position to provide its customers its services? The answer in both cases is "yes", Diana.

As for those contracts with the U.S. government; if there's something wrong with them, it's because Halliburton took advantage of the existing state of U.S. law and regulations governing Federal contracting. It seems to me that if that's the case, the entity that needs to change its ways is the Federal government, not Halliburton nor any other corporation doing business with the government.

Collapse -
Good post. The bottom line is,

In reply to: A couple basic facts, here:

Halliburton is making some intelligent corporate moves. They are also the 'company you love to hate', but that doesn't make them stupid or criminal at every opportunity.

Collapse -
Meanwhile, from the "Halliburton hypocrisy" files:

In reply to: Halliburton Will Move HQ to Dubai

Guess who's just bought $62 million worth of Halliburton stock?

Billionaire George Soros has quietly invested $62 million in the purchase of more than 2 million shares of Halliburton, the major government contractor criticized by his own Open Society Institute and the activist group he funds, MoveOn.org.

The holdings were disclosed in a quarterly filing with the U.S. Securities and Exchange Commission by Soros Fund Management LLC.

Were I Halliburton's management, I'd institute a stock buy back plan - and Soros' investment would be the first shares I'd buy back. I wouldn't want to be beholden to that loony for a dime...
Collapse -

In reply to: Meanwhile, from the "Halliburton hypocrisy" files:

Soros will make the price of the stock rise. I'm glad he bought it. Mine will be worth more.

Popular Forums

Computer Newbies 10,686 discussions
Computer Help 54,365 discussions
Laptops 21,181 discussions
Networking & Wireless 16,313 discussions
Phones 17,137 discussions
Security 31,287 discussions
TVs & Home Theaters 22,101 discussions
Windows 7 8,164 discussions
Windows 10 2,657 discussions


This one tip will help you sleep better tonight

A few seconds are all you need to get a better night's rest.