In business, inversion is when a company relocates its headquarters overseas in order to pay fewer taxes or acquire another overseas company. This once widespread practice is becoming more difficult to pull off as governments apply more scrutiny to the practice.
According to NASDAQ, “the Obama administration updated rules that sapped some of the tax benefits from these moves.”
Particularly affected have been pharmaceutical and healthcare companies. Medtronic, a medical device company, recently relocated to Ireland after acquiring a company there. The recent actions by the government have caused the company’s stock price to stumble. Mylan, another pharmaceutical company, had stocks fall by 1.6% after moving to the Netherlands.
Summary By MedicalGroups.com
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