No outflow of US companies after Ireland hikes corporation tax under OECD deal, US business leader says

A higher corporate tax rate in Ireland under a carefully negotiated OECD deal will not lead to any exodus of American companies.

The chief executive of the American Chamber of Commerce in Ireland (ACCI), Mark Redmond, underlined that in contrast, American companies should spearhead a major wave of investment in areas ranging from computing to robotics over the next decade.

Mr Redmond pointed out that a third of US multinationals operating in Ireland have been here for over 20 years.

Some American companies have been operating successfully in Ireland for over 50 years.

The overwhelming majority have invested heavily over many years in Irish factories, machinery and personnel.

ACCI represents over 800 American companies in Ireland employing 180,000 people directly and 144,000 people indirectly.

“When you look at the IDA projections for the current four-year plan, there are 50,000 additional jobs that will be created in the multinational sector,” he said.

“We think that’s quite realistic. I’ve never seen the current level of confidence in Ireland as a location for foreign investment.”

“One of our surveys showed that 94% of Irish-based multinationals said their head office had a very favorable view of Ireland for continued investment.”

ACCI, like other business and industry groups, pointed out that the potential 15% corporate tax rate had been flagged for a considerable period of time.

Mr. Redmond pointed out that, for American companies, priority issues lie in other areas such as cybersecurity, infrastructure development, the availability of skilled workers and staff housing.

“To attract this continued foreign investment, there are really critical factors that Ireland simply needs to master,” he said.

“It’s what keeps our members awake at night – it’s not advertised [OECD tax rate] although we will say the government has done a fantastic job with the process.

“Businesses need a talent pool, investment in R&D, completion of Ireland’s physical and digital infrastructure, broadband, cybersecurity and hosting that speaks to all [housing] capacity problem.

Mr Redmond warned that these are huge problems for multinationals doing business in Ireland and will have a bigger impact than any well-signalled changes to corporation tax.

“If we are to capture the next wave of foreign investment, Ireland needs to address these issues,” he said.

“We are going to see an explosion of foreign investment as we come out of the pandemic. It will be in areas like artificial intelligence, robotics, etc. We are well positioned to ride this wave as long as we focus on the problems that are of concern to the leaders of multinationals.

Ireland’s attractiveness for investment has been further underlined by its post-Brexit status as the only English-speaking EU member state.

The ties between Ireland and the United States have been further strengthened by Ireland exceeding its weight in terms of investment in the United States.

Despite Ireland’s small size in terms of global economic scale, Irish companies are the ninth largest investors in the United States and employ 110,000 workers in all 50 US states.