Rapidly growing Brazilian challenger bank Nubank is considering a move to the UK according to Bloomberg, a development which would spell great news for the British government financial policies.
Citing sources close to the matter, Bloomberg reports that Nubank and UK government officials met at the G20 leaders summit in Rio de Janeiro this week. The two parties discussed a potential change in Nubank’s domicile from the Cayman Islands to the UK.
A change in domicile would mean that Nubank’s operations would remain headquartered in Sao Paolo, its founding city, but its headquarters for legal purposes would be the UK. The city of London is the most likely contender due to its historic centre as a global financial capital.
A Nubank spokesperson told Bloomberg: “Nubank continuously reviews its corporate legal structure to align with the footprint of its operations. At this time, no decision has been made regarding the redomiciliation of Nu Holdings Ltd. or any other legal entities within our group.
“As a publicly traded company, we are committed to transparency and will follow standard communication protocols if and when any such decisions are made.”
Nubank is one of Latin America’s biggest financial success stories, with the company having built up an extensive customer base across Brazil, Colombia and Mexico. It recorded 100 million Brazilian customers last week, pushing its total pan-Latin American customer base up to 108 million.
A change in the company’s domicile would mark a significant victory for the UK’s Labour government, which has been painting itself as a party for business since before the July election and has since been courting interest from overseas businesses.
Rachel Reeves, Chancellor of the Exchequer, has repeatedly stated that the UK is ‘open for business’. In addition to searching for overseas investment, particularly around technology, the government is also keen to see Britain’s financial sector grow and innovate, as outlined by Reeves in her Mansion House speech last week.
With inflation having risen this week to 2.3% and economic growth slowing slightly from 0.3% to 0.1% between Q2 and Q3, the government is under pressure to deliver on its economic pledges. Gaining one of Latin America’s biggest fintechs as a domiciled entity could help in this regard.
Meanwhile, the change in domicile could also suggest that Nubank is interested in extending its reach to European shores. This is not a new prospect for Brazilian payments entities, with the country’s PIX instant payments system now available for use by tourists in Spain and Portugal.
It is important to note that the change is still just the subject of media reporting, has not been officially confirmed and would require approval by HM Revenue and Customers, the UK tax office.
