Shannon, Co. Clare, Ireland
When Gymboree Inc., a children's apparel and accessories company, decided to break into the European market with its upscale childrens' clothing stores, one of the first orders of business was establishment of a regional distribution center. It settled on the Shannon Free Zone in the southwest of the Republic of Ireland.
A primary reason for that decision was a highly favorable tax climate. Since 1981, Ireland has offered a 10 percent corporate tax rate for manufacturers, the lowest in Europe, an incentive that has attracted billions of dollars in foreign investment. Only Shannon, however, offers the same 10 percent tax treatment to logistics and other service providers. (Two small areas in Dublin extend the 10 percent rate to financial services.)
While Ireland's membership in the European Union, commitment to education and investment in telecommunications infrastructure all have played a role in its transfomation from a sleepy economy into the "Celtic Tiger," it is the low tax rate that has been indispensable in powering the country's blazing growth. The economy roared ahead at a rate of 6.75 percent in 1996 and will achieve a projected 7.7 percent growth for 1997.
"The first thing that makes anyone look at the Shannon Free Zone is the tax benefit," said Brian Walsh, Gymboree's distribution center manager in Ireland. "We committed to the free zone on the basis of a financial situation being developed in our favor."
Gymboree is "extremely happy with our partnership with Shannon Development Co.," added Walsh. "They are an excellent business partner. They assisted my colleagues in developing the project [and] did a tremendous amount of work in ensuring we set up legally to do business."
|Before selecting Shannon as the site for its distribution center, Gymboree studied a number of locations in the U.K.|
- Brian Walsh of Gymboree
|Shannon Airport originally was built to |
take advantage of the first suitable landfall for long-distance aircraft traveling from
the U. S. to Europe.
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