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I've been expecting this.

Reverse takeovers won't circumvent the rules specifying the origin of components in manufactured goods, if the manufacturer is a parent company with factories outside the EU. But I can see it making the administration significantly simpler, if it's handled by the notional head office in the European parent.

It's more complicated for companies providing services, and I can see why a European 'brass plate' parent of a company employing (say) programmers or copy-editors in London, and charging fees for European clients as if they all were domiciled within an EU country, might seem an attractive idea to an adventurous managing director.

It'll work for a while, and they'll get away with it until the European authorities realise what is going on, and implement a crackdown. That could be painful and I would urge all who offer advice on that - which I am in no way qualified to give - to explain this to their clients.

A cynical layman would look to this as an opportunity for 'double-dipping': bill them for setting up the parent and the reverse takeover, and buy the yacht you've always wanted when it comes to court a few years down the road.

I have no idea how this will play out for holding companies whose sole activity is holding other companies for unspecified or undisclosed activities.


It's going to be far, far more complex for banking: there will be a period where an elaborate shell-game of legal entities performs trading and advisory activity in offices in London which are, in a convoluted way, legally an entity in Paris.

It will, eventually, be called to order by the European authorities; mostly by the banking regulators, rather than the courts. Either way, there will be quite a lot of work, not all of which will be performed in-house: potentially, a bonanza for the Professions.

My chief concern is that these convoluted structures and circumlutions will become established all too well, before the law (or regulatory practice) is settled: however honest the intentions of the participants, they will collectively construct a labyrinth in which evasion, deceit and money-laundering for oligarchs will flourish, and eventually displace all honest trade.

That future will be lucrative - extremely so! - for some, for a while. It'll make the rest of us significantly poorer and extremely unwelcome in the capitals of Europe.