Ireland plans to woo Indian companies to its shores using the draw of a 12.5% corporate tax rate and access to Europe, according to a story from India Abroad News Service, or IANS, posing a challenge to New Delhi's efforts to make the domestic industry a centerpiece of economic growth.
|IDA's John Kilmartin|
"Some 40 Indian companies have already set up shop in Ireland, notably HCL, Wipro, Ranbaxy and Tata Consultancy Services, and several more are in the pipeline," John Kilmartin, director, Industrial Development Agency of Ireland, India office, told IANS.
"We have a host of other incentives for foreign investors," Kilmartin said, listing them as nil capital duty, extensive network of tax treaties, tax relief on acquisition of intangible assets and 25% research and development credit.
In the case of pharmaceuticals, Ireland has emerged as the world's largest net exporter of medicines worth €55 billion, IANS said, with Indian drugmakers Ranbaxy, Wockhardt and Reliance Life Sciences already operating there.
Indian companies are also facing a slew of issues back home from tighter scrutiny of manufacturing operations for U.S. FDA approved plants, to changes at the national level as the government of Prime Minister Narendra Modi seeks to boost the sector through a mix of regulatory reforms and incentives.
But several Indian companies are reportedly contemplating becoming "paper tigers," existing there only on paper, with facilities moved to other countries with regulatory delays for clinical trials and a confusing mess of interagency oversight getting the blame, according to a April report in the Financial Express newspaper.
Other companies outside of India have also seen advantages in moving to Ireland. In September last year, Illinois-based Horizon Pharma ($HZNP), now in a hostile bid for California's Depomed ($DEPO), moved its corporate address to Ireland to cut a tax rate in the United States around 38% of profits, the company told the Wall Street Journal at the time.
In the case of India, Kilmartin said the bid is to build the base of R&D, API process technologies and, of course, provide more jobs. "We attracted 6 investments from India last year and expect at least eight investments this year," he told IANS.
- here's the story from IANS