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Many multinational companies (MNCs) have set up in Ireland in recent years - Leaving Cert Geography - Question i - 2007
Question i
Many multinational companies (MNCs) have set up in Ireland in recent years. (i) Name one multinational company studied by you. (ii) Explain fully one reason why Ir... show full transcript
Worked Solution & Example Answer:Many multinational companies (MNCs) have set up in Ireland in recent years - Leaving Cert Geography - Question i - 2007
Step 1
Step 2
Explain fully one reason why Ireland is attractive to such companies.
Answer
Ireland is considered attractive to multinational companies primarily due to its favorable tax environment. The corporate tax rate in Ireland is one of the lowest in Europe at 12.5%, which incentivizes companies to establish their headquarters there. This low tax rate allows companies to maximize their profits, making Ireland a prime location for firms looking to reduce their tax burdens and enhance their operational efficiencies.
Step 3
Explain one reason why such companies might move elsewhere.
Answer
One reason that might lead multinational companies to relocate from Ireland is the potential for changes in tax legislation. If the government were to increase the corporate tax rate or impose stricter tax regulations, companies may seek alternatives in countries with more favorable tax regimes. This could impact their overall profitability and drive them to explore other international markets that offer better financial incentives.