Posted by Niall O'Dowd at 5/27/2009 12:56 PM EDT
Good news at last for Ireland. The decision of Accenture, the global management consulting company to move their corporate headquarters from Bermuda to Ireland may well be the first in a series of similar moves by major corporations. It could not come at a better time for the beleaguered Irish economy.
Accenture is moving in large part because of continued questions about US companies located in Bermuda and using the island as a tax haven. Ireland has been accused also of being a tax haven, but clearly, the major US companies do not regard it as such. The Irish government in a strongly worded letter, disputed the Obama administration's depiction of the country as being one which provided tax shelters. Clearly, corporate America agrees.
"A member of the European Union, Ireland offers a sophisticated, well-developed corporate, legal and regulatory environment," Accenture Chief Executive William Green said in a statement. That sounds like solid support and, no doubt, music to the ears of the Irish Industrial Development Authority. Accenture's board unanimously approved the move.
A company spokesman said Accenture is also moving because of continued criticism of companies incorporated in Bermuda. Apparently many of the major companies incorporated in Bermuda and Cayman Islands are eyeing a move to Europe and Ireland and Switzerland are the two preferred locations.
The move happens ahead of U.S. legislation seeking to tighten rules which allow firms to defer tax payments on their overseas profits if earnings are reinvested back into foreign subsidiaries.President Obama has made it clear that he will make a major push to end the preferential treatment.
The move by Obama had threatened to cause major problems for US corporations who are heavily invested in Ireland. However, this latest move by Accenture puts a different spin on the issue.
The big question, of course, will be whether they actually locate working offices there or just front operations with the real business being done elsewhere.
It hardly seems likely that the Irish government, strapped though they may be, will allow any kind of ghost operations to move in.
If they do they would quickly find themselves in the same mess that Bermuda and others are now facing.