Bermuda-Based Company Announces Intent To Leave

by Robert Lee, Tax-News.com, London

29 December 2008

Another Bermuda-based company has announced a change of domicile: health care products company Covidien Ltd, which has been in Bermuda for thirty years, announced last week that it planned to move to Ireland to capitalise on its "stable economic, legal and regulatory environment.”

The news will be another blow for Bermuda, just two weeks after conglomerate Tyco International Limited, global engineering firm Foster Wheeler Ltd and oil drilling firm Weatherford International Ltd all announced their intention to register in Switzerland.

Covidien has said that the move was not fiscally motivated, explaining that they would not benefit from a reduced tax bill as a result of the move but instead the firm would move to Ireland for its "long history of international investment and a good network of tax treaties with the US, European Union and other countries”; all crucial for Covidien, which has major operations in the US and Europe.

"Assuming shareholder approval, incorporation in Ireland will offer increased strategic flexibility and operational benefits as we continue to expand the rapidly growing international portion of our business," said Richard Meelia, chairman and chief executive officer. Covidien already has substantial operations based in Ireland, employing nearly 2,000 employees at 5 factories.

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