So why are these US companies incorporating in Ireland? Twitter stated it was expanding operations to better support their global users. Dropbox gave a similar reason.
Questions and speculation began online regardless. Most online comments seemed to attribute the move to three factors; money, data privacy and….more money.
Let’s take a look at each one:
A favourable tax rate is one potential reason. The average effective tax rate for corporates in the US is 27.1% compared to Ireland’s 12.3%. This could certainly be a factor for both relocations but given both entities already had operations in Ireland, and no doubt structured their groups so as to exploit the tax rates as effectively as possible, it seems as though this could be something of a red herring for both Twitter and Dropbox’s reasons for relocating.
Up to this point both companies have been US incorporated and, as mentioned above, they’ve both had Irish operations. As US corporations, they are subject to the US Patriot Act, a serious bone of contention for privacy advocates and businesses, which critics accuse of enabling the mass surveillance of the public. Edward Snowden specifically called out Dropbox as a tool to avoid if you care in any way about protecting your data in a 2014 interview.
To date one way US companies have attempted to address customers’ concerns has been to move servers outside of the US to Europe however that doesn’t address the issue as they remain US companies and therefore still subject to the Act. Some companies went further and moved the servers to a non-US group entity however this hasn’t stopped the US government from trying to get its hands on a non-US user’s data held by a server belonging to an Irish registered group company as seen in the Microsoft case.
It would appear that Dropbox moved for PR and Twitter moved for more money. So it would seem that as a Twitter user you should expect your data to be sold and as a Dropbox user you could still be subject to the almighty Patriot Act regardless of these companies’ locations. The only way to protect your data in the latter’s case is to encrypt documents before storing them on such platforms. It’s important to note here that by encrypting the documents is not to say that you won’t be subject to the Patriot Act it just means that the US Government needs to get the required data directly from you rather than via a backdoor.
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