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The key issue is that Lumileds itself is organized as a U.S. corporation; its current ownership is inconsequential, whether it's a U.S. citizen or a Dutch congl

The key issue is that Lumileds itself is organized as a U.S. corporation; its current ownership is inconsequential, whether it's a U.S. citizen or a Dutch conglomerate. CFIUS has had the legal authority to investigate -- and the president to block -- any transaction involving control of a U.S. company by a foreign national since the 1950s. It's worth noting that while (as far as I'm aware) there are relatively few CFIUS-equivalent organizations worldwide, most countries have some kind of mechanism for similar actions. That they rarely use them is a different issue entirely.

tormeh 11y ago
They can always just change nationality. That's a pretty common thing for companies to do. So nationality doesn't matter; it's a flag of convenience at best. The real issue is that the US government has the final say on which products are legal to sell in the US. If the USG says that no lumileds or products containing lumileds can be sold or imported in the US, then Lumileds is fucked. You don't want to lose the US market. Same goes for the EU.
- culturestate 11y ago
  You can't just pick up your company and move it from one country to another, especially when you're the size of Lumileds. The process for changing domicile is called inversion, and to make it work the U.S. corporation must either be acquired by or merge with a foreign corporation -- and that transaction would, again, be subject to review by CFIUS. Market access is a big carrot, yes, but it's not the stick in this case.
  - DrScump 11y ago
    <You can't just pick up your company and move it from one country to another> This has happened several newsworthy times in the past few years via the "inversion" mechanism, e.g. Medtronic, Pfizer, Applied Materials...
    - progressive_dad 11y ago
      What's stopping this becoming a new business model for SeaLand? Registering corporations as international entities undercutting the most favorable combinations of incentives from all current countries?
      - culturestate 11y ago
        SeaLand isn't recognized by any nation, and corporations can't operate as stateless entities.

tormeh 11y ago

They can always just change nationality. That's a pretty common thing for companies to do. So nationality doesn't matter; it's a flag of convenience at best. The real issue is that the US government has the final say on which products are legal to sell in the US. If the USG says that no lumileds or products containing lumileds can be sold or imported in the US, then Lumileds is fucked. You don't want to lose the US market. Same goes for the EU.

culturestate 11y ago
You can't just pick up your company and move it from one country to another, especially when you're the size of Lumileds. The process for changing domicile is called inversion, and to make it work the U.S. corporation must either be acquired by or merge with a foreign corporation -- and that transaction would, again, be subject to review by CFIUS. Market access is a big carrot, yes, but it's not the stick in this case.
- DrScump 11y ago
  <You can't just pick up your company and move it from one country to another> This has happened several newsworthy times in the past few years via the "inversion" mechanism, e.g. Medtronic, Pfizer, Applied Materials...
  - progressive_dad 11y ago
    What's stopping this becoming a new business model for SeaLand? Registering corporations as international entities undercutting the most favorable combinations of incentives from all current countries?
    - culturestate 11y ago
      SeaLand isn't recognized by any nation, and corporations can't operate as stateless entities.