Fri, Nov 07, 2014 - Page 15 News List

Start-ups say skills, not taxes, behind Ireland’s draw

PULLING POWER:The Irish Development Agency has attracted more than 100 growing firms to set up in Ireland over the past four years, despite the nation’s economic turmoil


Technology businesses taking part in this week’s Web Summit in Dublin said there was more to Ireland than the low taxes which have drawn fierce criticism from other European nations.

The industry gathering brings together big players, such as Inc and Google Inc, but also hundreds of far smaller players looking at what the nation has to offer in the digital domain.

“There’s a pool of developers and enterprise experience in Dublin right now,” said Paulo Tubbert, co-founder of Xpresso, an Irish company that eases parcel delivery by improving communication between couriers and e-commerce customers.

“The technology ecosystem helps smaller companies,” said 24-year-old Tubbert, who recently signed up Ireland’s largest courier and is looking to expand to the UK and Poland.

Ireland’s status as the European home for Silicon Valley has come under scrutiny after the European Commission said it was investigating the nation’s tax arrangements with Apple Inc.

Qualtrics head of partnership Kylan Lundeen said his US company had looked to “maximise our interests” by setting up in Ireland, but was interested mainly in the skills on offer.

“There were other places willing to do interesting things, but there was just good things happening here in Ireland. The people, the culture, the workforce — that’s what attracted us,” he said.

The company, which specializes in online data collection surveys and is planning to hire 100 people in Dublin this year, was helped by the Irish Development Agency (IDA) state body.

The IDA has broadened its approach in recent years to appeal to smaller companies too as it fights off competition for digital start-ups from other European nations like the UK.

IDA vice president of emerging business Mary McEvoy said tax rules are less important for smaller companies.

“They might first look at Ireland because they hear it’s lower tax,” she said. “But that doesn’t tend to be the final reason, especially for early-stage tech companies or emerging companies because they may not even have revenue yet so they’re not worried about tax.”

She said that her agency first engaged with some of the household names now based in Ireland when they were small companies.

“When we look back on our own track record, when we first met Facebook they just had 50 staff in California, the same with Apple back in the 1980s,” McEvoy said.

In the past four years, the IDA has attracted more than 100 emerging companies to set up in Ireland, despite Ireland’s economic turmoil as it entered a massive EU-IMF bailout in late 2010.

“There is no more pro-enterprise country in Europe,” Irish Prime Minister Enda Kenny said before ringing the bell to open New York’s NASDAQ stock exchange live from the Web Summit.

The conference, now in its fifth year, occurs just weeks after Dublin bowed to international pressure and closed a lucrative tax loophole favored by tech firms to minimize their tax to almost zero in some instances.

However, at the same time as it moved to close the “Double Irish” loophole, it announced it would introduce further tax breaks for intellectual property, similar to the “patent box” arrangements in Britain.

Ireland’s 12.5 percent headline corporation tax remains government policy. While it is not the lowest in Europe, the rate compares favorably with nations such as the UK or Germany.

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