The online recruitment firm Indeed is familiar to many Irish people, whether they have sent job applications to employers through its website, joined its own workforce of more than 1,000 in Dublin, or simply got off the Luas outside its striking St Stephen’s Green office. 

Corporate manoeuvres revealed in new filings by its Irish subsidiaries show that the group of HR tech behind Indeed and other recruitment brands around the world intends to base more and more business in Ireland. Some steps in this story are part of a familiar pattern: a US firm’s use of Dublin as a low-tax base to serve customers east of the Atlantic; expansion into an international corporate HQ; the reflection of mergers and acquisitions by parents on Irish operations. 

Two aspects linked to the geographical footprint of Indeed and its related companies are more unusual. On the one hand, the group is now Japanese-owned. On the other hand, it has made significant changes to the balance between its British and Irish operations as Brexit unfolded.

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In March 2012, Indeed became the latest tech multinational poached by the IDA to locate its Europe, Middle East and Africa (EMEA) headquarters in Dublin. The firm was founded by Paul Forster and Rony Kahan eight years earlier and based in Austin, Texas.

Indeed quickly rolled out the well-oiled multinational’s Irish blueprint, recruiting hundreds of multilingual staff to grow sales outside its home American market. At first, it operated the double Irish tax structure typical of US tech firms: its operations subsidiary in Dublin booked international sales, while profits were transferred to an Irish-registered, Cayman-resident holding company under intellectual property arrangements. 

At the end of 2015, in a vivid illustration of the shift in sectors growing foreign investment in Dublin, Indeed moved into the high-profile office building vacated by Bank of Scotland on St Stephen’s Green.

Six months after Indeed first set foot in Ireland, however, the Tokyo-listed conglomerate Recruit Holdings had bought the Texan firm in a transaction reported to be worth up to $1 billion. Recruit has been on an acquisition spree ever since, amalgamating companies around the world to form a global HR and recruitment technology giant. Only LinkedIn escaped its appetite in this sector, instead selling itself to Microsoft in 2016.

In 2013, shortly after gaining control of Indeed, Recruit liquidated the double Irish structure put in place by its previous owners and placed the fast-growing subsidiary Indeed Ireland Operations under the direct ownership of its Tokyo-based ultimate parent. 

Last year, following a reorganisation of group structures in Japan and in the US, Recruit revived the idea of a more complex holding structure here. This time, it is fully registered and domiciled in Ireland – and it reaches far beyond these shores.

New filings by group companies in Ireland this week show that Recruit Holdings formed a new company called RGF OHR International Ltd on March 8, 2019. This vehicle owns the entire issued capital of Indeed Ireland Operations, but also Glassdoor Hiring Solutions Ireland, the Irish subsidiary of the rival jobs website publisher Glassdoor – a Silicon Valley firm itself acquired by the Japanese group in 2018 for $1.2 billion. 

In June 2019, RGF OHR registered another Irish intermediary holding subsidiary, HR Tech Investments International, which had not yet any significant transactions to report when it filed its first set of accounts one month ago.

Subsidiaries move from UK to Irish ownership

The real action has been taking place inside Indeed Ireland Operations. In addition to the eight local Indeed subsidiaries established by the Dublin company to grow sales around Europe, in Singapore and in Mexico in previous years, the Irish office acquired the “full beneficial ownership” of three more in large markets in July 2019: Canada, Australia and the mothership’s home nation of Japan itself. 

These four units were previously held through the group’s UK unit (itself a subsidiary of Indeed Operations Ireland). As the Brexit transition period moved closer, Recruit went further in its use of Ireland as a conduit to control British assets: when it acquired Syft Online in May of last year and Blackstone Point in July, both recruitment platform providers in the UK, Indeed Ireland Operations was the entity conducting the transactions.

When Recruit purchased Workopolis, an online Canadian jobs website, in 2018, Indeed Ireland Operations had also acquired the corresponding assets through an Irish vehicle called WP Online Holdings.

The Irish subsidiary’s growing role is reflected in its annual accounts. It had 1,176 employees last December, paid an average gross annual salary of nearly €90,000, and plans to hire hundreds more. Its revenue increased by 43 per cent to €757 million last year. From a small loss in 2018, its bottom line surged to a pre-tax profit of €150 million in 2019. This is the first time the company is profitable, having accumulated over €250 million in losses during its first five years of presence in Ireland and barely balanced the books in 2018.

This also means the Irish entity is now liable to pay significant corporate tax here, booking a €22.2 million tax charge last year (though in the absence of a cash flow statement, it is unclear how much it has actually contributed to the Irish Exchequer so far – it still had a €7 million deferred tax asset on its balance sheet at the end of last year).

Since the liquidation of its double Irish structure in 2013, it has been unclear how Indeed Operations Ireland has been paying for access to the technology it uses to sell recruitment adverts around the world.

The heavy losses incurred by Indeed in Ireland since it arrived in Dublin may have been due to the company really burning cash to boost its international presence – or simply repatriating profits to overseas parents above the bottom line under the form of inter-company payments. 

For example, since the liquidation of its double Irish structure in 2013, it has been unclear how Indeed Operations Ireland has been paying for access to the technology it uses to sell recruitment adverts around the world. The Irish company reported at the time that it acquired €24 million worth of intellectual property between 2013 and 2014 – but quickly wrote €15 million off its value in 2015, greatly reducing the amortisation it has been able to offset against taxable profit ever since. “This decision was arrived at following a recent valuation based on revised future revenue projections,” directors declared then. It turns out the new Japanese owners were a lot less optimistic about the reportable value of Indeed’s IP than their US predecessors.

While many American-owned tech multinationals have more recently moved billions’ worth of intellectual property assets to Ireland in reaction to the late 2017 US tax reform, there has not yet been any signs of fresh moves in this direction in Indeed’s accounts.

Its Irish subsidiary, however, has been reporting the vast majority of its costs under an unspecified “other expenses” line, which inflated to €472 million last year. The company did not detail related party transactions for 2019, but the last time it did in 2017, it was spending between €35 and 40 million annually on purchases from US-based Indeed, Inc as well as fast-growing multi-million amounts in payments to each of its international subsidiaries.