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Increase in dividend repatriations by MNCs

Richard Barry · 2003-02-01 11:03:19

Surely the reason for this increase in profit repatriation is blindingly obvious? The world economy is in recession. The parent companies need cash more than ever, and as a result draw dividends from their cash rich Irish operations to fund day to day needs back home. In addition, many companies particularly in the Anglo…

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01-02-2003 12:03pm

#1

Richard Barry

Closed Accounts Posts: 57 ✭✭

Join Date: April 2002

Posts: 48

Surely the reason for this increase in profit repatriation is blindingly obvious? The world economy is in recession. The parent companies need cash more than ever, and as a result draw dividends from their cash rich Irish operations to fund day to day needs back home.

In addition, many companies particularly in the Anglo Saxon world have been forced to hand over large chunks of cash to their corporate pension plans so that they can meet their current pension payment obligations. Cause - their negligent pension investment managers who were overweight in stocks, playing a quarterly performance ratings game rather than managing the funds in their care prudently having regard to the “irrational exuberance” of the markets.

Accumulated earnings of Irish MNC subsidiaries are normally used to fund international expansion. The least tax-efficient and logical thing to do with the money is to repatriate it back home (in many jurisdictions anyway).

R.

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