5 ms·

Ya one day they are moving out of London because of Brexit, another day out of Hong Kong because of China. If these Financial "Centers" are easy to move why doe

by kodz4 7y ago

Ya one day they are moving out of London because of Brexit, another day out of Hong Kong because of China. If these Financial "Centers" are easy to move why does anyone need a Center in the first place?

esoterica 7y ago
Where did you get the impression the move was “easy”?
rolltiide 7y ago
> If these Financial "Centers" are easy to move why does anyone need a Center in the first place? Because at one point you did. And the existence of those places worked on removing barriers of trade. And now those places are being dismantled while the barriers of trade are already removed. So you get the luxury to look at it through the lens of the present, ignoring how it came to be completely. At this point financial centers offer different collections of favorable regulations that you can choose at your own whim. Separate jurisdictions shift nuances of law around and compete on this still. For example, many people access the US markets through Delaware "because they heard" and have no idea what the other 49 states, 1 district, and 5 territories offer despite having complete autonomy to compete over the last 30 years. Some of those 55 jurisdictions are faster, cheaper, have Chancery courts, have favorable court rulings completely opposite of Delaware, can lean on Delaware case law if desired, have newer and more interesting business types you can create, may be more private and anonymous, may be better for your business. Thats how centers develop and their utility. Its mostly the ease of getting the local government to listen to the desires of ephemeral entrepreneurs.
- multibit 7y ago
  Some of those jurisdictions, such as?
  - rolltiide 7y ago
    > Some of those jurisdictions, such as? It depends on what you want? The point is that you can shop for features, and Delaware isn't the end all be all. Sometimes it is as simple as making a list of the things you want and googling for it or asking around. Other times it requires actually reading the incorporation statutes, trudging through case law, simple because a state sucks at marketing. And other times it requires introducing and passing a new law in that state.
- robocat 7y ago
  > For example, many people access the US markets through Delaware "because they heard" and have no idea what the other 49 states Unless another state has a very compelling benefit, why make things riskier and difficult? Usually you want to find a solution that you can see works, that has a good network effects for professional services, and that has the largest number of similar businesses for stability (so that the state is not interested in causing problems directly or by side-effect, and the state has aligned incentives to help foreign businesses). The same thing occurs with offshore havens. Network effects matter. Network effects is given as a major reason for why YC recommends Delaware C-Corps: https://www.lawtrades.com/answers/y-combinator-startups-go-c-corp-route-delaware-vs-s-corp/ https://www.lawtrades.com/answers/y-combinator-startups-go-c...
  - rolltiide 7y ago
    > Unless another state has a very compelling benefit, why make things riskier and difficult? Because some of those 49 states, 1 district, and 5 territories have very compelling benefits and are not riskier and are not more difficult. Which professional service is most useful to you? Incorporation and legal services are extremely prevalent. Example: Wyoming has API based incorporation which takes less than 24 hours and is cheaper. Faster, cheaper and better: pick all three, its a valid option! The same top incorporation services for Delaware cater to Wyoming as well. Lets look at common users on this site or industry: - No Stripe Atlas target customer needs or benefits from Delaware over the above example of Wyoming. IIRC Stripe Atlas itself funnels people to Delaware - All VC backed companies with employees have higher compliance requirements by flocking to Delaware which passed stricter securities transparency laws giving employees more rights about information - No software engineering contractor that's lazily avoided all legalese but now heard they might want an LLC needs Delaware. They will also gain zero benefit from its fairly unique court of chancery. - No app developer gains more benefits from Delaware than similar states like Wyoming and never has any need for its fairly unique court of Chancery. (Wyoming also has a court of chancery) - pretty much only multinational conglomerates with complex M&A disagreements that even can be heard at a state-level court needs Delaware This isn't to present a false dichotomy of Delaware vs Wyoming. Wyoming has the same level of benefits as Delaware for these above use cases, except Wyoming happens to be faster and cheaper to use. If every entrepreneur was flocking to Wyoming irrationally, I would point out the exact same things. Or perhaps I would have spent time with the UCC and state legislators to make even more competitive incorporation statutes somewhere else.
- bobthepanda 7y ago
  In terms of law, sure. In terms of labor, specialists like having multiple employment options in case they ever need to jump ship, and for specialized enough services centers are the only places capable of offering such networks. New York is still the largest financial center in the US despite many attempts to dethrone it because it has built up so much of a center. And people don't really abandon centers unless something catastrophic happens.
  - closeparen 7y ago
    Wouldn’t most be locked up in non-competes?
    - bobthepanda 7y ago
      Non-competes eventually end, and IIRC in the finance industry they often pay you for the duration of the non-compete.
      - closeparen 7y ago
        After a couple years, sure. It would take a really compelling raise to make up for all that time without working.
    - djcapelis 7y ago
      Not in California or specifically Silicon Valley. To pick another financial center of the world.
      - closeparen 7y ago
        California is essentially unique in this way, while people are trying to generalize about centers in general. In no other center can you actually quit your job for a competitor; it’s doubtful that the competitor’s presence is relevant.
lallysingh 7y ago
For labor. People specialize and need a reasonable pool of employers in an area for wage competition. Not just at initial hiring time, but to keep the raises competitive.
tepidandroid 7y ago
From my own observations, financial centres typically act as gateways into more heterogenous or poorly understood regions... like an API gateway of sorts for countries. London acts as a financial centre for many businesses seeking to do business with EU nations. Hong Kong was historically the financial centre for traders seeking to do business with China. Being a former British colony, they had advantages such as being literate in English and understanding both eastern and western cultures. If indeed globalization has not yet run its course, we may see less and less of a need for these financial centres in the future.
germanlee 7y ago
It's called propaganda. Go back 4 or 5 years ago. The NYTimes, Bloomberg, WSJ, etc all ran the same stories back then. The comments were the same. Usually some "expat" living there giving his "expert" propaganda or some "expat" talking about had he had to leave hong kong because it was so bad. Back then, there was a lot of "ghost cities" scare mongering. A lot less of it today. You notice the same patterns. The "britain tried to give democracy to hong kong" propaganda. The "people of hong kong" prefer britain propaganda. China is about to collapse. Once the trade war nonsense ends, you'll see these stories and comments disappear. Just like all the "I hate facebook" stories and comments. Just like the "Russia controls everything in the US" stories and comments. Until it's time for "We've always been at war with eurasia". If only these people cared about freedom here at home as much as they "care" about freedom in china. You'll notice that most of the people ( journalists and commenters ) crying about censorship, privacy, freedom etc in china are the same ones demanding more censorship, less privacy and less freedom here and on social media.
- dang 7y ago
  Would you please stop posting in the flamewar style to HN? It is not a place for ideological battle and this sort of comment is super low-quality, regardless of how good your underlying points are. Internet rage is the most predictable and tedious commodity here. It has the effect on thoughtful conversation that salt has on a slug. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
cryptonector 7y ago
Because that's where the labor you need is. Because that's where the installed base (nowadays buildings, networks, data centers, ...) is. Because their legal and judicial frameworks are well adapted to the industry. Because of cultural inertia.

by kodz4 7y ago

esoterica 7y ago

Where did you get the impression the move was “easy”?

rolltiide 7y ago

> If these Financial "Centers" are easy to move why does anyone need a Center in the first place? Because at one point you did. And the existence of those places worked on removing barriers of trade. And now those places are being dismantled while the barriers of trade are already removed. So you get the luxury to look at it through the lens of the present, ignoring how it came to be completely. At this point financial centers offer different collections of favorable regulations that you can choose at your own whim. Separate jurisdictions shift nuances of law around and compete on this still. For example, many people access the US markets through Delaware "because they heard" and have no idea what the other 49 states, 1 district, and 5 territories offer despite having complete autonomy to compete over the last 30 years. Some of those 55 jurisdictions are faster, cheaper, have Chancery courts, have favorable court rulings completely opposite of Delaware, can lean on Delaware case law if desired, have newer and more interesting business types you can create, may be more private and anonymous, may be better for your business. Thats how centers develop and their utility. Its mostly the ease of getting the local government to listen to the desires of ephemeral entrepreneurs.

multibit 7y ago
Some of those jurisdictions, such as?
- rolltiide 7y ago
  > Some of those jurisdictions, such as? It depends on what you want? The point is that you can shop for features, and Delaware isn't the end all be all. Sometimes it is as simple as making a list of the things you want and googling for it or asking around. Other times it requires actually reading the incorporation statutes, trudging through case law, simple because a state sucks at marketing. And other times it requires introducing and passing a new law in that state.
robocat 7y ago
> For example, many people access the US markets through Delaware "because they heard" and have no idea what the other 49 states Unless another state has a very compelling benefit, why make things riskier and difficult? Usually you want to find a solution that you can see works, that has a good network effects for professional services, and that has the largest number of similar businesses for stability (so that the state is not interested in causing problems directly or by side-effect, and the state has aligned incentives to help foreign businesses). The same thing occurs with offshore havens. Network effects matter. Network effects is given as a major reason for why YC recommends Delaware C-Corps: https://www.lawtrades.com/answers/y-combinator-startups-go-c-corp-route-delaware-vs-s-corp/ https://www.lawtrades.com/answers/y-combinator-startups-go-c...
- rolltiide 7y ago
  > Unless another state has a very compelling benefit, why make things riskier and difficult? Because some of those 49 states, 1 district, and 5 territories have very compelling benefits and are not riskier and are not more difficult. Which professional service is most useful to you? Incorporation and legal services are extremely prevalent. Example: Wyoming has API based incorporation which takes less than 24 hours and is cheaper. Faster, cheaper and better: pick all three, its a valid option! The same top incorporation services for Delaware cater to Wyoming as well. Lets look at common users on this site or industry: - No Stripe Atlas target customer needs or benefits from Delaware over the above example of Wyoming. IIRC Stripe Atlas itself funnels people to Delaware - All VC backed companies with employees have higher compliance requirements by flocking to Delaware which passed stricter securities transparency laws giving employees more rights about information - No software engineering contractor that's lazily avoided all legalese but now heard they might want an LLC needs Delaware. They will also gain zero benefit from its fairly unique court of chancery. - No app developer gains more benefits from Delaware than similar states like Wyoming and never has any need for its fairly unique court of Chancery. (Wyoming also has a court of chancery) - pretty much only multinational conglomerates with complex M&A disagreements that even can be heard at a state-level court needs Delaware This isn't to present a false dichotomy of Delaware vs Wyoming. Wyoming has the same level of benefits as Delaware for these above use cases, except Wyoming happens to be faster and cheaper to use. If every entrepreneur was flocking to Wyoming irrationally, I would point out the exact same things. Or perhaps I would have spent time with the UCC and state legislators to make even more competitive incorporation statutes somewhere else.
bobthepanda 7y ago
In terms of law, sure. In terms of labor, specialists like having multiple employment options in case they ever need to jump ship, and for specialized enough services centers are the only places capable of offering such networks. New York is still the largest financial center in the US despite many attempts to dethrone it because it has built up so much of a center. And people don't really abandon centers unless something catastrophic happens.
- closeparen 7y ago
  Wouldn’t most be locked up in non-competes?
  - bobthepanda 7y ago
    Non-competes eventually end, and IIRC in the finance industry they often pay you for the duration of the non-compete.
    - closeparen 7y ago
      After a couple years, sure. It would take a really compelling raise to make up for all that time without working.
  - djcapelis 7y ago
    Not in California or specifically Silicon Valley. To pick another financial center of the world.
    - closeparen 7y ago
      California is essentially unique in this way, while people are trying to generalize about centers in general. In no other center can you actually quit your job for a competitor; it’s doubtful that the competitor’s presence is relevant.

lallysingh 7y ago

For labor. People specialize and need a reasonable pool of employers in an area for wage competition. Not just at initial hiring time, but to keep the raises competitive.

tepidandroid 7y ago

From my own observations, financial centres typically act as gateways into more heterogenous or poorly understood regions... like an API gateway of sorts for countries. London acts as a financial centre for many businesses seeking to do business with EU nations. Hong Kong was historically the financial centre for traders seeking to do business with China. Being a former British colony, they had advantages such as being literate in English and understanding both eastern and western cultures. If indeed globalization has not yet run its course, we may see less and less of a need for these financial centres in the future.

germanlee 7y ago

It's called propaganda. Go back 4 or 5 years ago. The NYTimes, Bloomberg, WSJ, etc all ran the same stories back then. The comments were the same. Usually some "expat" living there giving his "expert" propaganda or some "expat" talking about had he had to leave hong kong because it was so bad. Back then, there was a lot of "ghost cities" scare mongering. A lot less of it today. You notice the same patterns. The "britain tried to give democracy to hong kong" propaganda. The "people of hong kong" prefer britain propaganda. China is about to collapse. Once the trade war nonsense ends, you'll see these stories and comments disappear. Just like all the "I hate facebook" stories and comments. Just like the "Russia controls everything in the US" stories and comments. Until it's time for "We've always been at war with eurasia". If only these people cared about freedom here at home as much as they "care" about freedom in china. You'll notice that most of the people ( journalists and commenters ) crying about censorship, privacy, freedom etc in china are the same ones demanding more censorship, less privacy and less freedom here and on social media.

dang 7y ago
Would you please stop posting in the flamewar style to HN? It is not a place for ideological battle and this sort of comment is super low-quality, regardless of how good your underlying points are. Internet rage is the most predictable and tedious commodity here. It has the effect on thoughtful conversation that salt has on a slug. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

cryptonector 7y ago

Because that's where the labor you need is. Because that's where the installed base (nowadays buildings, networks, data centers, ...) is. Because their legal and judicial frameworks are well adapted to the industry. Because of cultural inertia.