Featured Article 07 Nov 2013

Adrian Wreckler
Irish Independent
November 7th 2013

Streamlined IDA machine is making the decision to set up shop here a no-brainer

Here are two lines that anyone covering new tech jobs announcements in Ireland hears a lot.

"We're setting up in Ireland because of the skills pool here."

* The IDA has been very helpful."

A common response among many of us is to raise an eyebrow. Apple may appreciate its Cork workforce, but €20bn in tax savings is nice too.

And yet, should all arriving tech firms be tarred with the same Double-Irish-with-a-Dutch-sandwich brush? Is there more to frequently cited "IDA rocks" responses than a smokescreen for a sweet tax deal?

I recently had a frank exchange on both issues with the founder and chief executive of Nitro, Sam Chandler. Nitro is a US-Australian online document firm that recently chose Dublin as a European base to hire 30 people.

Chandler gave me a detailed, step-by-step account of exactly what happened when deciding between Dublin and London, two big rivals for US tech firms. There isn't enough space here to go through every bit of it. But the overall picture he painted was one of a streamlined machine in Dublin and comparative chaos in London.

"London was a mess," he said. "There was confusion between agencies there as to who was organising what. No one seemed to be responsible for anything. The whole thing was a joke."

By comparison, he said, Ireland's IDA "handed us everything on a plate".

"There was no comparison," he said. "They had it all sorted. We gave them a list of things we were looking for, especially skills. They came back to us with a week's itinerary of meetings covering every topic.

"The biggest surprise was recruitment. Do you know how hard it is to recruit senior executive leadership? It is bloody hard. And we got a shortlist of four candidates, each one of whom I would have hired. Honestly, that is the first time I have ever come across that.

"We left Dublin after the week with a clear idea of what we were facing and proper, empirical data. The IDA had a tag team we were dealing with, too. Our contact was able to tell us that she could get us the prime minister on the line. That's unbelievable. There's genuine support here for companies like us."

Now I know this sounds like plamas of the highest order. But I like to think I have a horse manure radar. And this guy genuinely wasn't setting off any alarms.

The context of our discussion was a post Web Summit chat with nothing to gain for Nitro. When we moved on to the topic of tax and its relative importance as a recruiting factor, Chandler was adamant that tax breaks only kick in for big companies with big revenue or big profits.

"Look, you could double the tax rate here and we still would have come," he said.

"You have to look at it from the point of view of a company our size, which is $25m (€18.6m) in annual revenue. We're not really big enough to benefit from any fancy tax-planning. Honestly, we're still trying to create products and get the right people. We're nowhere near the stage of being at a revenue and profit level where Apple-style tax planning is a major issue."

But what about the future? Surely a low tax – or possibly even a no-tax – environment plays a part when considering Ireland as an international headquarters?

"Tax first, talent second is a narrative I've been reading in Irish newspapers in the past while," he said.

"But for a company our size, I swear to you it's the other way around. It really is.

"A tax rate might be appealing in the long run, but not at our stage. The only thing we're interested in is getting the right people and building the right product. That means sales, engineering and executive leadership. It really does."

Nitro will build to 30 people here, according to its launch announcement. The company will take most of its new staff from people already working in other Dublin-based tech firms.

"It's some talent pool that's building up here," said Chandler.

"Honestly, you've really now got the ecosystem going. I think if you keep doing what you're doing, lots of wealth is going to be created here."

There are many who still suspect that tax policy is a key part of Ireland Inc's pitch. But if it is, it seems to have passed Nitro's Sam Chandler by.

"Among global tech companies, it really comes down to London or Dublin when you're looking for a European base," he said. "Right now, Dublin is winning."

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