Don’t forget the small print: what business leaders miss when moving abroad

The FT’ recent coverage lamenting the persistent trend of UK directors fleeing Labour’s tax regime shines a spotlight on the strategic agility of high-net-worth individuals and their businesses. But looking at these moves – Eddie Hearn appearing as the latest high profile departure – we hope that these senior executives are not blindsided by the glittering appeal of low-tax jurisdictions: beneath the surface, the “small print” of employment law may be a factor they haven't bargained for.

The legislative direction from Downing Street certainly seems to feel at odds with entrepreneurial spirit with the Employment Rights Bill causing anxiety for UK employers. Coupled with abolished non-dom benefits, hikes in capital gains and national insurance and reduced inheritance tax relief, moving operations overseas can seem like good business sense. Yet too often, businesses overlook some of the legal trade-offs—especially those baked into the employment regimes of their chosen destinations.

Take the UAE, now the top destination and preferred haven. Dubai certainly offers some key draws - zero income and capital gains tax enough in itself – but as we have seen first hand in the recent Mahmood case, its employment legislation provides leaner protections and senior figures must weigh this up part of their broader strategic plans. Statutory concepts like unfair dismissal (non-existent in the DIFC in Dubai), statutory redundancy, and anti-discrimination laws are not as robust as in the UK. That may reduce employer costs on paper – no bad thing - but it also introduces unpredictability. Employment disputes may play out in unfamiliar legal systems, and enforcement mechanisms aren’t always as mature or certain.

Asia – another region poised to benefit from the UK exodus - poses similar complexities. In jurisdictions like Singapore, where employment law is streamlined and often employer-favourable, companies must grapple with strict statutory frameworks and cultural nuances that don’t always align with UK HR practices. Inconsistencies in benefits, termination rights, and employee expectations can generate operational friction - and legal exposure.

What looks like economic gain on the face of it can quickly become a reputational or regulatory liability if business owners don’t tread carefully. The seemingly “small print” of employment legislation becomes big news when disputes arise or employee relations sour.

Strategic relocation should be matched with similar levels of strategic legal planning. Before you chase lower tax bills, pause to ask: are my business contracts, policies, and governance structures fit for this new legal terrain? Are we ready to navigate a tribunal or court system that's not our own? If the answer is “not yet or I'm not sure” it’s time to seek proper employment counsel.

In short - by all means, pursue the sunny uplands of a low tax territory, but don’t forget the fine print, especially when your workforce is the engine behind your success. In international moves, what you don’t know can hurt you, so our advice to those seeking to take advantage of lower cost jurisdictions is to make sure your next chapter is as compliant as it is profitable.