Kaspersky Lab, the global cybersecurity firm, on September 7 opened its first European research and development (R&D) centre, in Dublin. With an initial investment of close to $5mn, the Russian firm plans to create 50 new Dublin-based roles in the next three years.
The decision to set up in the Irish capital, known as the Silicon Docks due to the presence of many of the big US technology firms, was cemented after founder Eugene Kaspersky met and hung out with Irish Prime Minister Enda Kenny and U2 rockstar Bono, sources close to the deal told bne IntelliNews in May.
Dublin was chosen on account of its growing reputation as a major European tech hub, providing access to a highly skilled IT talent pool and a strong network of innovative tech companies. The Irish capital is home for the European headquarters of Google, Facebook, Twitter, Amazon and LinkedIn, as well as the top five global cybersecurity firms, including Symantec and McAfee.
The Dublin office, which will be headed by Irish national Keith Waters, will be responsible for core parts of new Kaspersky Lab solutions, focused on targeted attack detection and investigation. “Dublin was an obvious choice for the company’s first European R&D office, owing to the quality and density of tech talent there, and of course, the city’s vibrant and appealing living conditions,” said Nikita Shvetsov, chief technology officer at Kaspersky Lab.
The Russian company is leading an invasion of Dublin by Russian tech companies, start-ups, programmers and developers – many of whom are looking abroad as Russia remains stuck in recession and worries grow over the political and legal environment there. Numerous emerging Russian tech companies have left Moscow for foreign shores in the US, Singapore, Dubai and Latvia over the past few years as the country struggles to emerge from its deepest recession since 2008. Repression of social media and fear for intellectual property has accelerated that trend.
Martin Shanahan, CEO of IDA Ireland, the state agency responsible for attracting foreign investment, was in Russia in mid-May meeting a number of companies and explaining why Ireland was the right place for them to do business. “In recent years, we have seen increased investment from Russian companies and, as these firms grow, they have the potential to create several hundred jobs over the next few years,” Shanahan told bne IntelliNews. “Ireland is proving to be an attractive location for Russian companies looking to expand their operations abroad and tap into the tech talent pool here.”
The Irish agency is also understood to have held talks with the Russian search engine Yandex and leading internet company Mail.ru about setting up in Dublin. RT, the Kremlin-controlled English-language TV station, set up a Dublin office last year headed by Ivor Crotty.
Not terribly taxing environment
The appeal of Dublin for many of these tech firms is Ireland’s low corporate tax rate of 12.5%, its highly educated workforce, ease of doing business, and greater access to markets and networks in the EU and US.
However, Kaspersky insisted that their decision to locate in Ireland is nothing to do with the lax tax regime, as sales will not be routed through their Dublin office. “Unlike Apple and others, we are purely doing this to tap into the local human capital,” said one source, referring to the US tech company’s complex tax arraangements that enabled it to pay less than 1% tax on its 2014 sales but which has left it with a €13bn tax bill from the European Commission.
Enterprise Ireland, a separate state agency responsible for the development and growth of Irish enterprises in the world market, has spent over €1mn in bringing five Russian tech companies to Dublin in the past year, under the umbrella of its new Competitive Start-up Fund. The agency provides the Russians with support to secure visas and accommodation as well as mentoring. The fund is open to start-ups from all around the world, but a third of its 100 applications last year come from Russia or Russian-speaking Belarus and Ukraine. A new programme is already underway this year with a similar level of interest from Russia.
“Last year the biggest challenge was trying to set aside clichés and stereotypes about why Russians want to take their ideas outside of Russia, especially when there is money attached, but thankfully the people we found are very good at doing that because they are very internationalised, easy to deal with and quite talented people,” Gerry McCarthy, head of Enterprise Ireland in Russia, told bne IntelliNews in an interview.
The idea is to relocate Russian and Commonwealth of Independent States firms to Dublin, and to eventually re-enter their home markets after being set up as Irish companies. “It’s not just the visas and accommodation,” said McCarthy, “it’s more to do with a personal mentoring to make sure people are getting the right knowledge to push their idea forward and make it accessible to as many markets as possible.”
McCarthy talked of “waves” of programmers and developers from Russia, Ukraine and Belarus relocating to work for Google, Facebook and Twitter in Dublin.