Thursday, June 11, 2009
According to the Irish Times this week, U.S. electrical manufacturer, Cooper Industries, is seeking shareholder approval to move its place of incorporation from Bermuda to Ireland. This move follows closely on the heels of a similar move last month by health care group, Covidien, an offshoot of Tyco International, which also moved from Bermuda to Dublin. The moves appear to be prompted by an announcement from the Obama Administration that it intends to crack down on the use of tax havens such as Bermuda. Ingersoll-Rand, maker of refrigeration equipment, also has received shareholder approval to move from Bermuda to Ireland. Why Ireland? It has a relatively low corporate tax rate at 12.5%. The U.S. government has identified Ireland as one of three locations where U.S. multinationals make a large proportion of their overseas profits. Coopers also stated that it chose Ireland because of its stable business, legal, and regulatory environment, its membership in the EU, its history of international invesment, and its solid network of tax treaties. Ireland could certainly use the boost in foreign investment - it has been particularly hard hit by the global economic downturn with unemployment expected to reach 15% this year.