Patrick Counihan @irishcentral July 05,2014 04:27 AM

American start-ups are flocking to join the tech revolution in Ireland – and it’s not down to the tax regime.

Fledgling Silicon Valley companies have recognised Dublin as their gateway to European and global success according to a new report.

The start-ups don’t qualify for the tax breaks available to multi-nationals simply because they only apply to profits says the report by business writer Heather Somerville on the website www.contracostatimes.com.

Instead start-ups are following Apple, Intel, Google and Facebook across the Atlantic because it makes good business sense.

Somerville reports that these startups are setting up their first overseas offices in the hope that the booming tech city of Dublin will become their launchpad to global success.

She writes: “Dublin looks a lot like home: a young and educated workforce, global business culture, population thirsting for new technology and Twitter and Facebook signs dotting the horizon.

“Labor and real estate are cheaper than in other European destination cities and, more than the familiar language or palatable food, the city’s tech tenant roster makes Dublin feel comfortable to Silicon Valley transplants.”

San Francisco data software start-up New Relic have just made the commitment to Ireland.

Chief marketing officer Patrick Moran explained: “It feels a little bit like a mini-San Francisco. All of our startup friends are there.”

New Relic opened a Dublin office in February and plans to hire about 50 employees at their first office outside the US.

Chris Cook, president and chief operating officer at New Relic, added: “Dublin is the launching point for our European strategy and an essential part of our global expansion plans.”

Fellow San Francisco-based companies like Airbnb, cloud software company Zendesk and file storage and sharing startup Dropbox are also new to Dublin.

Yelp have announced plans to open a 100-person Dublin office as have SurveyMonkey.

Ireland’s business development plan is co-ordinated by the government backed IDA body.

Rory Mullen, senior vice president of IDA Ireland in Mountain View, told Somerville: “Now what you’re seeing is much smaller companies that at a very early stage decided they needed a European presence.”

Mark Harris is chief financial officer of Malwarebytes, an anti-virus software company in San Jose which will open in Ireland in the next year

He said: “There are many companies that have ended up there and done well, so it gives you confidence. When you’re making this type of leap you don’t want to feel like you’re on your own.”

The report adds that Silicon Valley Bank has invested $50 million into Irish tech- and science-based companies and plans to double that and valley venture firms have opened offices in Ireland.

Silicon Valley VC investments in Irish startups increased 158 percent in the first quarter of this year from the same period in 2013.

Start-ups will have to wait for the tax breaks however according to Somerville.

Brian Caulfield is a partner at venture firm DFJ Esprit in Ireland which also has a Menlo Park location.

Caulfield said: “One of the great myths is that those companies are coming because of our low taxes. Of course that’s part of the picture, but it’s also about Ireland being English-speaking, having a good business environment, being part of the eurozone.

“A lot of these startups aren’t profitable and aren’t going to be profitable for a long time.”

Jen O’Neal, founder and chief executive of San Francisco-based vacation rental search site Tripping, said: “We wouldn’t be moving just for the tax incentive. We’re such a small company. If we can save money by being there, that’s great, but there are other reasons.