Wise's move to a US primary stock listing highlights a concerning trend for the London market. A new US tax bill (Section 899) threatens to penalize foreign-owned firms domiciled in countries with "unfair foreign taxes," including most EU members and the UK. This could involve a new withholding tax on US-sourced income, escalating to 20% over four years. Goldman Sachs suggests US re-listings as a way for European companies to avoid this tax, lowering their non-US ownership below 50%. However, experts caution this is complex and requires more than just relisting. The bill also exacerbates existing concerns about London's competitiveness compared to US markets, as evidenced by recent failed IPOs and the valuation discount European equities face.

Prepared by Christopher Adams and reviewed by editorial team.