SHAREHOLDERS IN New York-listed healthcare group Covidien, an offshoot of Tyco International, have approved the transfer of its place of incorporation to Dublin from Bermuda.
Covidien’s move was signalled in April, weeks before the Obama administration introduced a clampdown on tax havens.
Although the White House specifically cited Ireland among three small jurisdictions which account for a large portion of the foreign profits made by US multinationals, Covidien’s move is further evidence that Ireland may benefit from a campaign which will also threaten the Irish operations of some US firms.
In a separate development two days ago, management consulting group Accenture said it was seeking approval from its shareholders to move its place of incorporation to Dublin from Bermuda.
In a statement yesterday, Covidien said it expected to obtain approval for the transfer of its place of incorporation from the Supreme Court of Bermuda on June 4th. “Covidien expects that the transaction will be completed on June 4th, 2009,” the firm said.
“Following completion of the transaction, shares of the Irish company, Covidien plc, will begin trading on the New York Stock Exchange on June 5th, 2009, under the symbol ‘COV,’ the same symbol under which Covidien Ltd shares currently trade.”
At a special meeting yesterday, Covidien’s investors also approved the creation of distributable reserves of the business, which the company expects to be approved by the High Court in Dublin within three to four weeks after completion of the transaction.
Business sources attribute corporate transfers into Ireland from locations such as Bermuda to the transparency of Ireland’s corporate taxation regime and the fact that the State is not regarded as a tax haven by President Barak Obama.
Although the Irish activities of some US multinationals have led to tax disputes with the US authorities, Ireland has long argued that taxation provisions here mean that the jurisdiction cannot be classified as tax haven.
Havens are typically characterised by zero or low tax, a lack of transparency and the absence of any requirement to carry out business in a jurisdiction. Irish authorities say conditions here are much different, although the comparatively low 12½ per cent corporation tax rate is a key factor when multinationals locate here.
A number of British companies have recently moved their corporate headquarters to Ireland.
