Ireland: A Leading Country for U.S. Businesses to Establish Operations in to Hold, Develop and Manage Global Intellectual Property

Ireland has increasingly drawn more interest from U.S. biotech and fintech corporations that want to establish an office there due to the various attractive opportunities the country presents, not only from a tax perspective but for a number of other reasons as well. 

At a recent panel discussion hosted by EisnerAmper and Citco which took place June 26th at Citco’s offices in Midtown Manhattan, a quartet of panelists discussed what makes Ireland an optimal country in which U.S. businesses could hold, develop and manage global intellectual property.
Here are some that were mentioned: 

-Ireland is deemed to be in the top ten most innovative countries in the world. It’s no wonder that some of the most prominent global software companies, medical technology companies and pharmaceutical companies all have a presence there. Apple, Google, LinkedIn, Twitter, Facebook and PayPal all have their EMEA (Europe, the Middle East and Africa) headquarters in Dublin.

-The top-tier universities and quality education system prepare the students with the skills and knowledge necessary to be successful employees of the country’s biotech and fintech companies. Between 2015-2016, over 30% of students enrolled in STEM (science, technology, engineering and math) courses.

-Finally, from a tax perspective, Ireland has many benefits for U.S. biotech and fintech corporations to set up there.  Here are a handful: 

• It is a long-standing member of the European Union (EU) and compliant with standards of the OECD (Organizations for Economic Cooperation and Development), ensuring that any companies that set up in the country will establish effective internal controls, ethics, and compliance programs. 
• It is an onshore jurisdiction, allowing non-resident companies to register in the country. 
• Companies that set up there can be eligible for the attractive 12.5% corporate tax rate, one of the lowest tax rates in the world and in the EU. 
• They can also qualify for a 25% R&D (research & development) tax credit if they carry out research and development activities involving systemic, investigative, or experimental activities; are in the field of science and technology; and seek to make scientific or technological advancement; among other requirements.

-However, despite the various benefits, it is still important that U.S. biotech and fintech corporations that want to set up in Ireland also understand the challenges when it comes to tax including: 

• Ensuring they comply with the BEPS (base erosion and profit sharing) framework, which refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity.   
• Complying with ATAD (Anti-Tax Avoidance Directive), a handful of measures to guarantee they don’t avoid paying taxes.
• Familiarizing themselves with the EU’s proposed digital tax, aimed at large multinational companies such as Google, Facebook and Amazon who set up in Ireland. If implemented, any large digital enterprises with EU digital revenues over EUR 50 million and total global revenues of over EUR 750 million would be required to pay a 3% tax.

EisnerAmper would like to thank the panelists for their time and insights:

-Eric van Aalst, President, Citco Corporate Services Inc. (Moderator)

-Cormac Doyle, Partner/Head of Tax, EisnerAmper Ireland

-Laura Hamilton, President of the Boston Irish Business Association (BIBA).

-Gavin Lee, Head of International Trade, EisnerAmper Ireland

-Jon Zefi, Principal and a member of the Tax Advisory Services Group, EisnerAmper