Harris Presents Law And The Rise Of Multinational Companies In The First Era Of Globalization Today At The Oxford-Virginia Legal Dialogs

Ron Harris (Tel Aviv; Google Scholar) presents a chapter from Empire Ltd.: Law and the Rise of Multinational Companies in the First Era of Globalization (1844-1914) at the Oxford-Virginia Legal Dialogs today hosted by Tsilly Dagan and Ruth Mason:

The First Era of Globalization (1870-1914) involved not only more intensive international trade but also territorial expansion and the annexation of new colonies, mainly in Asia and Africa, to the British Empire, mass migration from Britain to the settler colonies and beyond the Empire, and a massive, unprecedented outflow of capital and spread of stock exchanges. Globalization opened up the arena to transnational companies. These faced legal challenges and opportunities in more than one location. Given these momentous historical developments, company law could no longer be viewed as domestic law and had to adjust to the new international dimensions.

At the same time as private international law shifted from preoccupation with federations to dealing with imperialism and globalization, the field of company law shifted from being a subfield of constitutional law to being a subfield of private law and from dealing mainly with domestic companies to dealing at its cutting edge with multinationals. The intersection gave rise to the new field of private international company law.

This chapter focuses on four significant sets of issues that were addressed in the formative of this new field of law: recognition of foreign companies, the law applicable to internal affairs between shareholders and directors of companies, the law applicable to the relationship between company creditors and the company in insolvency, and the law that applies to company regulation (antitrust and trading with the enemy) and taxation.

The last part of this section, which deals with taxation, will likely attract the participants' attention in next week’s Oxford-Virginia Legal Dialogs and readers of the TaxProf Blog. It will contrast how companies were conceptualized and how their domicile and choice of law were made in the core fields of private international company law, incorporation, internal affairs, and dissolution with those that applied in company taxation. Was there a coherency and consistency? A spoiler, there was not. Did this facilitate the creation of offshore tax havens? Yes.

The burgeoning literature on the history of tax havens initially dealt with the period from the 1970s onwards, followed by the Post-World War II period, and more recently, it extended to investigating the interwar period. This section aims to push the history of tax havens to the pre-World War I period.

This section exposes the hitherto uninvestigated roots in the First Era of Globalization. One can look for such roots concerning the taxation of corporate income tax, taxation of dividends, inheritance and death tax applicable to corporate stock, and stamp duties on corporate stock certificates. I will focus on how corporate residence was determined for the various types of taxes.

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