When a Company Moves Abroad, Shareholders Pay! (Economic Observer)

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IN A SKIT from the New York Financial Writers Association "Financial Follies," the performers sang, "It is little wonder why we smile/We found an offshore domicile/We like the sunshine on our backs/And it's perfect for escaping tax/We're all moving to Bermuda/Ride a moped and a scooter/It's a nice vacation/And we like the tax evasion."

A number of U.S. companies have reincorporated in recent years to take advantage of lower corporate income taxes. In some cases, they've paid no taxes at all. While it's good for the corporate bottom line, if you're a shareholder, you end up paying! Here's how it works, what to watch out for, and how to prevent the problem.

A U.S. firm changes its legal address …