Covidien to incorporate in Ireland

Covidien Ltd., which is operated out of Mansfield but formally chartered in Bermuda, said today its board voted to move its incorporation to Ireland next year.

The medical-device maker said the move would offer "increased strategic flexibility and operational benefits" as it expands abroad. Ireland is a member of the European Union, making it easier for Covidien to do business with other European countries. In addition, the company said, 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 chief executive Richard J. Meelia in a statement. The move must still be approved by shareholders and the Bermuda Supreme Court.

In contrast to Bermuda, where Covidien has just five employees, Covidien 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 the country. It also set up a new Irish holding company, Covidien plc.

Still, Covidien plans to continue to run the company largely out of Mansfield, where Meelia and many other senior executives are based. It has about 2,000 employees in Massachusetts and 42,000 worldwide.

In an interview earlier this year, Meelia said the company decided to remain incorporated in Bermuda when it was spun out of Tyco International Ltd. last year primarily for tax reasons. Like Bermuda, Ireland is known for its low corporate tax rates and Covidien said it did not expect its taxes to significantly change.
(By Todd Wallack, Globe staff)