Companies that have recently invested in Ireland are claiming that they will not leave the country, despite its economic problems.
Greenfield investment monitor fDi Markets recorded 18 new investment projects into Ireland in September of this year, the second best month on record for 2010. These companies included Next, Verizon Communications, Deloitte, Marks & Spencer and Google. None said that the country’s struggles would cause them to pull out.
Peter Barron, director of communications and public affairs at Google, told fDi Magazine that Ireland was a key part of its expansion plans and that it had no intention of leaving the country.
He said: “Google employs almost 1800 people at its Europe, Middle East and Africa headquarters in Dublin, which provides technical, sales and operations support to customers in more than 50 countries. We also recently announced a new Geo Operations centre in the city, which is creating 200 new jobs.
“Our experience in Ireland has been very positive and we have been able to attract the staff we need to support our users, advertisers and partners. Dublin is fast becoming the multilingual internet capital of Europe and has provided a natural environment for Google to flourish.”
Ireland has been one of the most popular destinations for FDI in recent years, something that helped the country’s economy grow exponentially in the 1990s and early part of last decade.
However Ireland’s ongoing financial crisis and multibillion euro bailout packages have prompted fears that Germany and France might insist that it raise its well-known corporate tax rate of 12.5%. There was no such provision in any of the bailout packages, and for now it seems that the tax rate will remain in place. Ireland’s government and several foreign firms in the country said that hiking the corporate tax would hurt the country even more and ultimately prove harmful to its recovery. For now the 12.5% rate seems safe, but either way, most companies that are already on the ground look prepared to stay for the long term.
Spokespersons from these companies did not want to speculate on the future of the tax rate, but expressed doubt that they would leave if the corporate tax regime were to change.
Emma Johnson, a spokeswoman at Marks & Spencer, said such a course of action would be “unlikely” as the company has been in Ireland for over 30 years and have 21 stores there. Her counterpart at Next, Alistair Mackinnon-Musson, said he could not imagine the firm leaving Ireland and that it was prepared for any changes to the tax system.