The switch from Switzerland to London also shows the favourable climate for growth and business in the UK, said the company.
INEOS chairman Jim Ratcliffe said: "Whilst INEOS is an Anglo-Swiss company, our new base in London reflects our British roots.
"The future for INEOS is very bright and much of this optimism comes from our UK-based operations.
"We currently supply one in 10 British homes with gas, we have a growing trading and shipping business and our chlorvinyls business has doubled in size.
"We are also planning to extract shale gas in the north of England and to grow the newly revitalised Grangemouth."
The new office offers a state-of-the-art base for INEOS, supporting its UK operations whilst maintaining its global reach of 17,000 employees worldwide.
Ratcliffe added: "We have immense confidence in Britain's economic future - the current business climate makes sitting our new headquarters in the UK an easy decision.
"INEOS will continue to grow both in the UK and worldwide. Britain is a good location to ensure both of these goals."
Climate change and industry minister Nick Hurd welcomed the news. He said: "This decision is another vote of confidence in the British economy and confirms the company's commitment to further long-term investment and growth in this country."
The news, which broke just a day after power producer Drax agreed to buy Opus Energy in a £340m deal, has provided yet another shot in the arm to the UK’s energy sector.
Drax said the takeover of small business supplier Opus - which has more than 265,000 customer meters - will combine with its existing Haven Power provider to create Britain's fifth biggest non-domestic energy retailer.
George Rafferty, chief executive of NOF Energy, the business development organisation for oil, gas, nuclear and offshore renewables sectors, which has 450 members in the energy sector supply chain, praised the move.
He said: "The decision to locate the INEOS headquarters to London is a very positive move for the company and signals its confidence in the UK.
"It is also positive for the UK supply chain, which will be keen to build strong links with the operator.
"INEOS’ offshore activities have generated considerable interest from supply chain companies, which will be of benefit to the operator.
"UK companies have an excellent reputation for delivering innovative technology-led solutions and services that support the operations in the harsh environments of the North Sea and have also been utilised in other locations around the world.
"They have also been instrumental in helping the UK offshore industry achieve a 45% drop in operating costs, which is enabling the North Sea to remain an attractive investment opportunity for companies such as INEOS."
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