Covidien Limited, which is chartered in Hamilton, Bermuda, has reported that its board voted to move its incorporation to Ireland next year, as part of a reorganization that will create an Irish holding company, Covidien plc.
The company said that the move would offer "increased strategic flexibility and operational benefits” as a member of the European Union. In addition, Covidien said that Ireland has many treaties with other countries that Bermuda lacks.
“The decision to move to Ireland was made after an extensive analysis of several possible alternatives,” said Covidien’s CEO Richard J. Meelia. The move must still be approved by shareholders and the Bermuda Supreme Court.
In contrast to Bermuda, where Covidien has five employees, the company already has five factories and nearly 2,000 employees in Ireland. As part of the move, Covidien said it plans to add finance and regulatory staffers in Ireland and hold most of its board meetings in that country.
However, Covidien plans to continue to run the company largely out of Mansfield, Mass., where Meelia and many other senior executives are based, according to the Boston Globe. It has about 2,000 employees in Massachusetts and 42,000 worldwide.
The company does not expect the reorganization will have any material impact on its financial results, and does not anticipate any changes to its U.S. operations or work force.